Which of the Following Are Reasons That Explain Why Regulators

question 69

Multiple Choice

Which of the following are reasons that explain why regulators pursued a policy of regulatory forbearance toward thrifts in the early 1980s?

• A) Regulators knew that the FSLIC did not have sufficient funds to close insolvent S&Ls and pay off their depositors.
• B) Regulators were probably too close to the people they were supposed to be regulating to close down thrifts and put them out of business.
• C) Regulators preferred to sweep the problems that thrifts were suffering under the rug in the hope that they would go away as the economy improved.
• D) All of the above explain regulatory forbearance.
• E) Only A and B of the above explain regulatory forbearance.

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Definitions:

Social Proof

The psychological phenomenon where people assume the actions of others in an attempt to reflect correct behavior for a given situation.

Group Conformity

The phenomenon where individuals in a group tend to match their beliefs, attitudes, and behaviors to those of the group.

Cialdini

Refers to Robert Cialdini, renowned for his research in the psychology of persuasion and how it is applied in marketing and influence strategies.

Spiral of Silence Theory

Explains that ideas and opinions expressed in mass media can discourage expressions by people who hold dissenting opinions due to a sensitivity of feeling isolated or rejected.