Banks became more willing to make subprime loans because of:
A. leveraging.
B. securitization.
C. herd behavior.
D. hedging.
Answer: B
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The Added Perspective in the text refers to the success—or lack of success—of econometric computer models as an aid in economic forecasting. It argues that they have
a. sharpened forecasts to such an extent that they are almost 100 percent reliable b. eliminated all "errors and omissions" in forecasting models c. worsened the success to non-success ratio of economic forecasts d. led to better predictions but still cannot forecast major "turning points" e. not led to better predictions except in forecasting major "turning points"
Deregulation includes reducing governmental control over some aspects of private industry, while increasing control of others.
Answer the following statement true (T) or false (F)
Behavioral economists have found that people ________, and this leads to irrational decisions.
A. often undervalue opportunity costs B. often forget money is fungible C. often forget to ignore sunk costs D. All of these statements are correct.
Choice architecture is the:
A. the internal mental framework people use in order to make all their decisions. B. choices that force utility-maximizing decisions for individuals. C. political framework under which policy is made. D. organization of the context and process in which people make decisions.