Identify a Condition Under Which Conflicts of Interest Are Exploitable

question 32

Multiple Choice

Identify a condition under which conflicts of interest are exploitable.

• A)Market for bank service is very competitive.
• B)Banks have monopoly power over their customers.
• C)Information flows between the customer and the bank are symmetric.
• D)Bank does not possess any information advantage over its customers.
• E)Bank places a relatively high value on its reputation.

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Definitions:

Higher-order Conditioning

A conditioned response is linked to a new stimulus by associating the new stimulus with a previously conditioned stimulus.

Conditioned Stimulus

A previously neutral stimulus that, after association with an unconditioned stimulus, comes to trigger a conditioned response.

Neutral Stimulus

A stimulus that initially produces no specific response other than focusing attention before it is associated with an unconditioned stimulus.

Extinction

The process through which a conditioned response is weakened by presenting the conditioned stimulus without the unconditioned stimulus.