Difference between "matter" and "problem"

[sophie]

In my exercise book, there is a multiple - choice question like that:
That so many students failed the test is no laughing .....
A. Thing
B. Matter
C. Affair
D. Problem
The correct answer is B.
I wonder why we don't choose D as well. Can you explain the difference between "matter" and "problem"?
Thank you in advance.
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On earth there is nothing great but man, in man there is nothing great but mind.

[Mister Micawber]

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'No laughing matter' is idiomatic.
.
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Canadian-American native speaker
who teaches English for a living at Mister Micawber's
ESL cafe: Interview with Mr. Micawber