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Q. Explain why the FDIC is following a "too-big-to-fail" policy of fully protecting all depositors at the largest banks.
Answer: It is a tricky question the FDIC does that even though officially it still applies only to the $100,000 limit. Almost certainly the idea is that the cost to one depositor is unbearable relative to the small cost we all need to pay as a collective. As well there are the issues of political pressure and avoiding blaming the government for mismanaging the safeguards.
Q. What explains the nearly universal scope of the Great Depression? Answer: The international gold typical played a central role in starting deepening and spreading the Great
Q. Explain why under fixed exchange rate, monetary policy is ineffective whereas under floating exchange rate it is effective in rising output. Answer: In floating by purchasi
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Q. Explain the effects of a permanent increase in the U.S. money supply in the short run and in the long run. Assume that the U.S. real national income is constant. A raise in
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Q. Consider, as a result of several dynamic factors associated with exposure to international competition, Albania's economy grew, and is now shown by the rightmost production pos
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