Initially, policy makers were not concerned about the financial crisis because:
A)conventional economic theory was telling them they did not have to worry about such an event occurring.
B)no other comparable crisis had happened before in history.
C)fiscal policy would kick in to stabilize the economy.
D)banks and other financial institutions had convinced policy makers that they would take care of any type of crisis.

Question

Quizplus · Accepted Answer

Conventional economic theory often assumed markets were inherently stable or that minor instabilities would correct themselves without leading to a full-blown crisis, leading policymakers to underestimate the risk of a financial crisis.

Initially, Policy Makers Were Not Concerned About the Financial Crisis