Why Might Monetary Policy Authorities Be Concerned That Since the Early

question 99

Multiple Choice

Why might monetary policy authorities be concerned that since the early 1970s, non-bank financial intermediaries account for a growing share of the economy's financial assets?

• A)Monetary policy authorities fear that this situation might erode the value of the U.S.dollar in foreign exchange markets.
• B)Monetary policy authorities are concerned that this situation might promote income inequality since high income individuals are more likely to use the services of non-bank financial intermediaries, compared to low-income individuals.
• C)Monetary policy authorities fear that this situation might lessen their ability to control money supply because non-bank financial intermediaries are not as heavily regulated as banks.
• D)It will be more difficult for monetary policy authorities to monitor those assets that are most closely related to the level of economic activity.