Which of the Following Reasons Explain Why Federal Regulators Adopted

question 41

Multiple Choice

Which of the following reasons explain why federal regulators adopted a policy of regulatory forbearance toward insolvent financial institutions in the early 1980s?

• A) The FSLIC lacked sufficient funds to cover insured deposits in the insolvent S&Ls.
• B) The regulators were reluctant to close the firms that justified their regulatory existence.
• C) The Federal Home Loan Bank Board and the FSLIC were reluctant to admit that they were in over their heads with problems.
• D) All of the above are reasons.
• E) Only A and B of the above are reasons.

---

Definitions:

Psychoanalysis

A therapeutic approach and theory of psychology developed by Sigmund Freud that aims to treat mental disorders by investigating the interaction of conscious and unconscious elements in the mind.

Cognitive Psychology

A branch of psychology that studies mental processes such as perception, memory, thought, and problem-solving.

Gestalt Psychology

A theory of mind and brain proposing that the operational principle of the brain is holistic, parallel, and analog, with self-organizing tendencies; or, the idea that the perceptual whole is different than the sum of its parts.

Humanistic

Relating to a psychological perspective that emphasizes the study of the whole person and their unique individuality and potential.