Many Agree That Macro Prudential Tools Are the Right Instruments

question 12

Multiple Choice

Many agree that macro prudential tools are the right instruments to deal with bubbles, credit booms, or dangerous behaviour in the financial system. These are:

• A) rules that regulate trading activities in the financial markets.
• B) rules that are aimed directly at employees and firms.
• C) rules that regulate trading activities in the foreign exchange markets.
• D) rules that protect the rights of consumers.
• E) rules that are aimed directly at borrowers, lenders, and financial institutions.

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Definitions:

Principal

The original sum of money borrowed in a loan or invested, excluding any interest or dividends.

Business Activity

Business activity involves actions taken by companies or entrepreneurs to produce, sell, or trade goods and services to generate profit.

General Rule

A widely accepted standard or procedure that is typically followed in a particular field or situation.

Agent

An individual or entity authorized to act on behalf of another, often in business transactions, creating an agency relationship.