In the 1970s and 1980s people continue to keep money in savings and loan associations despite the fact that many had negative net worth. The insurance fund for these institutions did not have nearly enough assets to pay the deposits of the associations that legally should have been closed. How can we best explain people's actions in this case?

People are irrational.
People should have pulled their funds out, but were slow to realize what was happening.
People were protected by the gold standard.
People believed the government had a policy rule to not let depositors lose even if the existing law did not fully protect depositors.

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