Which of the Following Reforms Would Reduce the Likelihood of a Future

question 378

Multiple Choice

Which of the following reforms would reduce the likelihood of a future financial crisis?

• A) increased regulations that would make it more difficult for lenders to foreclose on borrowers who are delinquent on mortgage payments
• B) expansion of government-sponsored lending in order to make loanable funds more readily available to sub-prime borrowers
• C) institutional changes that would strengthen the property rights of shareholders and provide financial managers with a stronger incentive to pursue long-run objectives
• D) frequent regulatory changes in order to search for and find the combination that would be most effective

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Definitions:

Knowledge Linking

The practice of connecting disparate pieces of information to form new insights or understandings, often used in learning and innovation processes.

Control Over

refers to the power or authority to direct, influence, or regulate the behavior of others or the course of events.

Barriers to Entry

Factors that make it difficult for new firms to enter a market, including high startup costs, strict regulations, and existing competition.

Channels of Distribution

The paths or routes through which goods and services flow from the producer to the consumer or end user.