Which of the Following Is Not a Reason Financial Regulation

question 31

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:

Weakens

Describes the decrease in strength or value of an entity, such as currency depreciating in value against others in the foreign exchange market.

Euro

The official currency of 19 out of the 27 European Union countries, known as the eurozone.

Exchange Rate

The amount one currency is worth in the terms of another for conversion purposes.

C$

A symbol often used to denote the Canadian dollar, the currency of Canada.