In the Financial Crisis That Precipitated the 2007-2009 Recession,people Systematically

question 80

Multiple Choice

In the financial crisis that precipitated the 2007-2009 recession,people systematically overestimated their prospects for financial gain.Which branch of economics would most likely have expected to predict this?

• A) Neoclassical economics.
• B) Keynesian economics.
• C) Behavioral economics.
• D) Classical economics.

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Definitions:

Risk Environments

Provide probabilities regarding expected results for decision-making alternatives.

Objective Statistical Procedures

Quantitative methods used to analyze data and make decisions based on statistical evidence rather than subjective judgment.

Intuition

The ability to understand something instinctively, without the need for conscious reasoning.

Optimizing

Optimizing involves making the best or most effective use of a situation or resource, often by balancing different factors or constraints.