Financial Regulation Was Not Adequate to Deal with the 2008

question 186

Multiple Choice

Financial regulation was not adequate to deal with the 2008 financial crisis because:

• A)before 2008 banks were very small and could be effectively regulated by the states.
• B)up until the 2008 crisis, the market had worked very well in preventing banking crises, so there was very little need for bank regulation.
• C)the role of shadow banks had become very important, but shadow banks were not subject to banking regulation at the time of the 2008 crisis.
• D)the Supreme Court had ruled that the regulatory powers of the Federal Reserve were unconstitutional and prohibited the Fed from using its regulatory powers.

Recognize the influence of both nature and nurture on human development.

Comprehend how culture and social environment shape cognitive development.

Differentiate between major theories of human development and their perspectives on how people grow and change.

Understand the multidimensional aspects of human development and how they interrelate.

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Definitions:

Marginal Costs

The increase in expense associated with manufacturing an additional unit of a product or service.

Moral Hazard

A situation in which one party engages in risky behavior or fails to act in good faith because the negative consequences are borne by another party.

Coase Theorem

An economic theory that suggests that if trade in an externality is possible and there are no transaction costs, parties can negotiate solutions to conflict that lead to an efficient outcome regardless of the initial allocation of property.

Externalities

Economic side effects or by-products that affect an uninvolved third party; can be positive or negative.