A severe financial crisis in 2007 triggered the Great Recession. The Dodd-Frank Act was passed in 2010, intending to prevent another such crisis through tighter regulations. In the context of the aggregate demand-aggregate supply model, what is the best representation of the more stringent requirements on financial institutions?

Choose the answer that best explains this change. 0 The law decreases the value of the dollar. 0 The law increases the degree of price confusion among consumers, who then defer purchases of big-ticket items. 0 The law imposes additional costs on nancial rms to comply with the new regulations, decreasing the ability of the nancial markets to translate savings into investment. 0 The law reduces the amount of condence that investors have in the nancial markets, causing them to reduce their willingness to lend.