D. Limiting systemic risk and ensuring the stability of the financial system as a whole
Answer: Option D
Solution (By JKSSB Mock Tests)
Macroprudential policy uses regulatory and supervisory tools to mitigate systemic risk and to increase the resilience of the financial system as a whole, complementing microprudential supervision of individual institutions.
Explanation:
Social preferences encompass motives such as altruism, inequity aversion, reciprocity and spite that make an individual’s utility depend on the payoffs or actions of other people.
Explanation:
Fear of floating describes the empirical regularity that many countries officially classified as floaters in fact intervene frequently and allow only limited exchange-rate variability, often because of balance-sheet vulnerabilities.
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