Neuroeconomics and Collective Intelligence — Living Systems Economics examination

Eleven questions. Nine of eleven passes, and you can take it again as often as you like.

What did Damásio's patients with ventromedial prefrontal damage reveal about decision-making?

Damage to this region improves objective analysis Emotion always distorts otherwise flawless reasoning Without emotional guidance, intact reason cannot choose well Reasoning on its own produces the best decisions, at least in the way it is usually presented
What does neuroeconomics say about the 'deviations' from Homo economicus?

They are the brain's actual operating system They are random errors that cancel out They occur only in less educated people They disappear entirely in large, liquid markets
What does the anterior insula's activation during unfair offers suggest?

People register unfairness viscerally, rejecting it at a cost People are indifferent to fairness when money is at stake Unfair offers trigger the brain's reward response instead Only trained economists notice when an offer is unfair, particularly during periods of rapid change
According to Paul Zak's research as presented, how is trust built?

Only through legal contracts backed by enforceable penalties, particularly when the pressure is highest A loop in which trust releases oxytocin that promotes more trust Through open competition between strangers in a market By steadily reducing face-to-face contact between parties
Which four conditions does the module list, after Surowiecki, for wise crowds?

Consensus, speed, central control and deep expertise, particularly during periods of rapid change Diversity, independence, decentralisation, aggregation Size, wealth, education and technology Homogeneity, loyalty, secrecy and hierarchy
What pattern does every financial bubble exhibit, according to the module?

Excess diversity of opinion eventually paralyses trading Transparent information drives prices upward Too much independent judgement slows markets Diversity and independence collapse into herding
Why does the module say the scarcity narrative is so persistent?

It has been proven statistically in every single case It is required by law in the teaching of economics It is neural infrastructure that trips threat detection first It appeals mainly to careful and rational analysis
Why does the module treat composite narratives as more than illustrations?

Stories are rehearsals that rewire pathways and can release oxytocin Stories mainly entertain the reader between difficult arguments Stories can replace the need for any supporting evidence, particularly when the pressure is highest Stories make the book's key facts easier to memorise for exams
In the module's framing, what is a financial panic?

A deliberate central bank policy A rational repricing on fundamentals A healthy market correction A collective amygdala hijack
Which institutions does the module describe as the economy's 'collective prefrontal cortex'?

Automated trading algorithms operating at high speed Credit rating agencies acting on their own Quarterly earnings targets set by corporate boards, provided nothing else changes in the meantime Circuit breakers, reserves, antitrust and media literacy
How did Southside Community Bank reduce loan defaults?

By raising interest rates to cover the losses from defaults By selling its riskiest loans on to a large national chain By treating chronic stress as the root cause and supporting borrowers By tightening credit checks and rejecting more loan applicants