Which term best describes changes to laws and institutions to prevent future economic crises?

Which term best describes changes to laws and institutions to prevent future economic crises?

• A. Relief
• B. Reform
• C. Recovery
• D. Reservations

Answer: (B)

Reform is the process of changing laws and institutions to prevent future economic crises. It focuses on structural changes—new regulations, stronger oversight, and clearer rules for how markets operate—so vulnerabilities exposed by a crisis are addressed before they can recur. Relief covers short-term aid to individuals or businesses during or after a downturn, not long-term rule changes. Recovery describes the return to normal economic activity after a crisis, and reservations isn’t a term used for policy actions in this context. Examples include stricter bank capital requirements, improved supervision, and consumer protections implemented after a crisis.

Reform is the process of changing laws and institutions to prevent future economic crises. It focuses on structural changes—new regulations, stronger oversight, and clearer rules for how markets operate—so vulnerabilities exposed by a crisis are addressed before they can recur. Relief covers short-term aid to individuals or businesses during or after a downturn, not long-term rule changes. Recovery describes the return to normal economic activity after a crisis, and reservations isn’t a term used for policy actions in this context. Examples include stricter bank capital requirements, improved supervision, and consumer protections implemented after a crisis.