Which of the Following Was Not a Lesson from the 2007-2009

question 18

Multiple Choice

Which of the following was not a lesson from the 2007-2009 financial crisis?

• A)Financial regulations were too "light" prior to the crisis.
• B)Excessive complexity made the financial system more fragile and dangerous.
• C)Both monetary policy and fiscal policy are needed in order for the economy to recover.
• D)Regulatory failures were based primarily on poor job performance.

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Definitions:

Interindustry Competition

Competition that occurs between firms in different industries, as opposed to intra-industry competition within the same industry.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of operation increases.

Herfindahl Index

A measure of market concentration, calculated as the sum of the squares of the market shares of all firms within the industry.

Market Power

The ability of a firm or group of firms to manipulate the price or quantity of goods and services in the market, typically by restricting supply to influence prices to their advantage.