While Many Analysts Defended the Actions Taken by the Fed

question 150

Multiple Choice

While many analysts defended the actions taken by the Fed and the Treasury to respond to the financial crisis in 2008,others were critical of these actions.The critics were concerned that by not allowing large firms to fail

• A)smaller firms will resent not receiving similar assistance.
• B)stockholders and bondholders of these firms were not allowed to receive the proceeds from the sale of assets that would have occurred if the firms had declared bankruptcy.
• C)there is an increased likelihood that other firms will engage in risky behavior in the future with the expectation that they will also not be allowed to fail.
• D)there will be less competition in the U.S.economy,which could led to higher prices for consumers.

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Definitions:

Clinical Psychology

A branch of psychology focused on diagnosing and treating mental illness, emotional disturbances, and dysfunctional behavior through various therapeutic methods.

Psychological Disorders

Psychiatric states defined by shifts in thought processes, feeling, or behavior that result in discomfort or reduced capability.

Diagnosis

Diagnosis is the process of identifying a disease or condition from its symptoms and diagnostic tests.

Overconfidence

Overconfidence is a cognitive bias in which a person's subjective confidence in their judgments is reliably greater than their objective accuracy.