Economists Who Believe That Policy Errors Are the Source of Economic

question 74

Multiple Choice

Economists who believe that policy errors are the source of economic instability argue that the crisis of 2008 was primarily the result of

• A) housing regulations that undermined sound lending practices and Fed policies that generated the housing boom and bust.
• B) the stock market crash.
• C) the actions of speculators who drove up the world price of oil, the domestic price of gasoline, and other energy sources.
• D) persistently high interest rates during the decade leading up to the crisis.

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Definitions:

Possible Alternatives

Various options or courses of action that are available for consideration in decision-making processes or problem-solving situations.

Bounded Rationality

The concept that individuals make decisions based on the limited information available to them and their finite capacity to process information.

Managers

An advocate for stability and the status quo.

Conception of the World

An individual or collective understanding and interpretation of the world around us, including beliefs about nature, society, and the universe.