Government regulations to reduce the possibility of financial panic include all of the following EXCEPT
A)transactions costs.
B)restrictions on assets and activities.
C)disclosure.
D)deposit insurance.

Question

Quizplus · Accepted Answer

Transactions costs are not a government regulation to reduce the possibility of financial panic. Instead, they are a market mechanism that can help to discourage certain types of transactions that may contribute to financial instability. The other options (B, C, and D) are all government regulations that can help to reduce the likelihood or impact of financial panics. Restrictions on assets and activities can limit the amount of risk that financial institutions take on, while disclosure requirements can help to ensure that investors have access to more complete and accurate information. Deposit insurance provides a safety net for depositors, which can help to prevent bank runs and other forms of panic.

Government Regulations to Reduce the Possibility of Financial Panic Include