What term indicates a loss of problem-solving capability due to extreme emotional distress?

The term that indicates a loss of problem-solving capability due to extreme emotional distress is "panic." When someone is in a state of panic, their emotional reactions overwhelm their cognitive functions, inhibiting their ability to think clearly and make rational decisions. Panic can cause an individual to become so overwhelmed by their feelings that they experience difficulty in processing information, focusing on tasks, or considering solutions to problems.

In contrast, while stress can certainly affect cognitive function, it does not necessarily lead to the complete inability to solve problems like panic does. Frustration can result from difficulty in problem-solving but is more an emotional response to obstacles rather than a state of cognitive paralysis. Confusion may arise from various sources, including cognitive overload or lack of information, but it does not specifically denote the emotional distress that leads to panic. Thus, panic is the most accurate term for a complete loss of problem-solving ability under extreme emotional distress.