Economists believe that the way that policymakers handled the financial crisis:
A) reduces the probability of another financial crisis.
B) will shrink the number of banks.
C) increases moral hazard.
D) will lead to less risk-taking by banks.
E) bankrupted the federal government.

Question

Quizplus · Accepted Answer

The response to the financial crisis involved massive bailouts of banks and other financial institutions. This could increase moral hazard, as these institutions may feel that they will be bailed out again in the future if they engage in risky behavior. This could lead to the recurrence of similar crises in the future.

Economists Believe That the Way That Policymakers Handled the Financial