7. Surprisingly to free market ideologues,_________ and __________— the two pillars of laissez-faire economics—failed to keep the markets away from the precipice of disaster. A) Alan Greenspan and Milton Friedman B) collaterized debt obligations (CDOs) and standardized financial products C) self-interest and competition D) futures and options E) Real Estate Investment Trusts (REITs) and sale-leaseback deals Ans: C 8. An example of ________ __________ can be seen when banks perceive themselves as “too big to fail”. Such banks behave differently than if they perceived that they would have to pay the consequences for their sometimes risky actions. In the run-up to the Economic Crisis of 2008, many major financial institutions in the US took on enormous amounts of debt to amplify the gains they were making because they misperceived that the federal government would provide a bail-out for their firms if things turned bad. A) ethical vice B) Lex Mercator C) moral hazard D) judicial imperative E) habeas corpus Ans: C 9. The Efficient Market Hypothesis, A) proposes that it is impossible for markets to be wrong because the price of any security represents all the information held by individuals in the market. B) works well in market bubbles. C) takes as an assumption that rather than automatons populate markets. homo sapiens D) has only recently displaced the adaptive markets hypothesis. E) was developed by Sir Richard Branson. Ans: A
7. Surprisingly to free market ideologues,_________ and __________— the two pillars of laissez-faire economics—failed to keep the markets away from the precipice of disaster. A) Alan Greenspan and Milton Friedman B) collaterized debt obligations (CDOs) and standardized financial products C) self-interest and competition D) futures and options E) Real Estate Investment Trusts (REITs) and sale-leaseback deals Ans: C 8. An example of ________ __________ can be seen when banks perceive themselves as “too big to fail”. Such banks behave differently than if they perceived that they would have to pay the consequences for their sometimes risky actions. In the run-up to the Economic Crisis of 2008, many major financial institutions in the US took on enormous amounts of debt to amplify the gains they were making because they misperceived that the federal government would provide a bail-out for their firms if things turned bad. A) ethical vice B) Lex Mercator C) moral hazard D) judicial imperative E) habeas corpus Ans: C 9. The Efficient Market Hypothesis, A) proposes that it is impossible for markets to be wrong because the price of any security represents all the information held by individuals in the market. B) works well in market bubbles. C) takes as an assumption that homo sapiens rather than automatons populate markets. D) has only recently displaced the adaptive markets hypothesis. E) was developed by Sir Richard Branson. Ans: A
test-bank-sustainable-enterprise-1st-edition-mark-peterson.docx