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Show, for three regulatory measures of your choice, how they are intended to improve the stability...

Show, for three regulatory measures of your choice, how they are intended to improve the stability of the financial system but could have negative consequences.

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Answer #1

Three regulatory measures could be:-

1) increase in tax.

2) some regulatory schemes.

3) ban on some goods.

Regulatory measures are general made for the welfare on a society. Say, regulations over alcohol. All the above will hold effective if applied in a case of regulating alcohol. But the negative consequence will be a decrease in government's revenue as, (in this case), govt gets most of its revenue from the tax alcohol.

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