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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. In the year 2000, Americans flocked to Paris. What economic forces made French goods seem so cheap to residents of the United States? Answer: One main factor was a sharp f
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Q. Explain how the German Bundesbank gained its low-inflation reputation. Answer: Essentially Germany's experience with hyperinflation in the 1920s and yet again aft
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Q. Why did the Fed step in to organize a rescue for Long Term Capital Management (LTCM) in September 1998, rather than simply letting the trouble fund fail? Was the Fed's action
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Development through stabilisation and reform can be understood as follows The reasoning here was that the trade and resource transfer could not, by themselves, lift L
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Q. Analyze the effects of devaluation on an economy. Answer: Devaluation basis a rise in output a rise in official reserves and an expansion of the money supply. A private cap
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