One of the Core Problems That Created the Financial Meltdown

question 73

Multiple Choice

One of the core problems that created the financial meltdown of 2008 was that large loans were made to individuals who could not repay them, and the finance companies purchased these bad debts without realizing how poor the prospects of repayment were. Which of the following decision-making errors was made by the lenders and borrowers?

• A) hindsight bias
• B) availability bias
• C) overconfidence bias
• D) confirmation bias
• E) anchoring bias

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Definitions:

Enriched Environments

Settings or conditions that provide increased sensory, cognitive, and social stimulation, which are thought to enhance learning and development.

Synapses

The junctions between neurons through which they communicate with each other, transmitting signals via chemical or electrical means.

Y Chromosomes

A type of sex chromosome, present typically in males, that is involved in sex determination; males have an XY genotype, while females have XX.

Sex Hormones

Chemical substances produced by the sex organs and adrenal glands that regulate sexual development and behavior, as well as reproduction.