The Policy of Regulatory Forbearance

question 24

Multiple Choice

The policy of regulatory forbearance

• A) meant delaying the closing of "zombie S&Ls" as their losses mounted during the 1980s.
• B) benefited "zombie S&Ls" at the expense of healthy S&Ls, as healthy institutions lost deposits to insolvent institutions.
• C) had the advantage of benefiting healthy S&Ls by giving them the opportunity to attract deposits that began to leave the "zombie S&Ls."
• D) did both A and B of the above.
• E) did both A and C of the above.

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Definitions:

Balance Theory

According to Heider, people prefer attitudes that are consistent with each other over those that are inconsistent. A person (P) tries to maintain consistency in attitudes to, and relationships with, other people (O) and elements of the environment (X).

Cognitions

The mental action or process of acquiring knowledge and understanding through thought, experience, and the senses.

Three-Component Model

A model in psychology that views attitude as having cognitive, affective, and behavioral components.

Attitudes

Psychological tendencies expressed by evaluating particular entities with some degree of favor or disfavor, reflecting how individuals think, feel, and are inclined to act.