Which of the Following Is NOT a Reason Financial Regulation

question 7

Multiple Choice

Which of the following is NOT a reason financial regulation and supervision is difficult in real life?

• A)Financial institutions have strong incentives to avoid existing regulations.
• B)Unintended consequences may happen if details in the regulations are not precise.
• C)Regulated firms lobby politicians to lean on regulators to ease the rules.
• D)Financial institutions are not required to follow the rules.

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Definitions:

Inversely Related

A relationship between two variables where one increases as the other decreases, or vice versa.

Upward-Sloping

Characteristic of a line or curve that rises as it moves from left to right, used to describe certain types of supply curves.

Production Possibilities Curve

A graphical representation showing the maximum quantity of goods that can be produced using limited resources to the fullest extent, at a given technology level.

Maximum Combinations

Maximum combinations represent the highest number of product or service bundles that can be produced or offered given a set of resources and technology.