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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. Explain how the timing of a balance of payment crisis is determined. Be careful to state all assumptions. Answer: The assumptions of the model are: Prices are el
An International Regime for FDI and MNCs
who looses from tarrif and quota?
explain the source of foreign capital
The Source of Comparative Advantage can be understood as follows: The source of comparative advantage could be productivity differential (Ricardo) or differences in the factor
Q. Suppose Australia, a land (K)-abundant country and Sri-Lanka, a labor(L)- abundant country both produce labor and land intensive goods with the similar technology. Following t
Q. Explain why the exchange rate model based on PPP is a long-run theory. Answer: PPP theory is a financial approach to the exchange rate. It is a long-run theory for
Application of defferential calculus in economics
The Concept of Comparative Advantage is explained below: To illustrate the concept of the comparative advantage, we take the instance of two equi-sized equi-endowment countries
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