When Regulators Chose to Allow Insolvent S&Ls to Continue to Operate

question 31

Multiple Choice

When regulators chose to allow insolvent S&Ls to continue to operate rather than to close them,they were pursuing a policy of

• A)regulatory forbearance.
• B)regulatory kindness.
• C)ostrich reasoning.
• D)ignorance reasoning.

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Definitions:

Predictions Incorrect

Situations where anticipated outcomes fail to materialize as expected due to various factors such as flawed assumptions or unforeseen events.

Confirmation Bias

A tendency to search for, interpret, and remember information in a way that confirms one's preconceptions.

Behavioral Economists

Behavioral economists study how psychological, cognitive, emotional, and social factors affect economic decision-making and models.

Suboptimal

A situation or outcome that is not the most efficient or desirable due to being less than the best possible choice.