The Financial Instability Hypothesis Attempts to Explain

question 11

Multiple Choice

The financial instability hypothesis attempts to explain

• A)why a period of prosperity may lead to an eventual collapse.
• B)how the mixture of hedge, speculative, and Ponzi spending units determines the overall health of the economy.
• C)why there is a natural tendency for the economy to experience long term boom-crisis cycles.
• D)All of the above are correct.

---

Definitions:

Type B Behavior Pattern

A personality type characterized by less competitive, more relaxed, and less stress-prone behaviors than Type A.

External Locus of Control

A belief that outcomes in one's life are determined by external factors beyond one's control, as opposed to believing in the ability to influence outcomes through own efforts.

Internal Locus of Control

A psychological concept referring to individuals who believe they have control over the outcomes of their actions and experiences.

Coronary Heart Disease (CHD)

A disease characterized by the buildup of plaque in the coronary arteries, which can lead to reduced blood flow to the heart.