"The internationalization of banking has weakened national safeguards against banking collapse, but at the same time it has made the need for effective safeguards more urgent." Discuss
What will be an ideal response?
True. Students should elaborate on:
(1 ) No deposit insurance, in particular, inter-bank deposits are unprotected
(2 ) Absence of reserve requirements
(3 ) Bank examination more difficult to enforce
(4 ) Not clear which group of regulators has responsibility for monitoring a given bank's assets
(5 ) Not clear which central bank, if any, is responsible for providing Lender of Last Resort assistance.
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If British government bonds pay a higher interest rate than U.S. government bonds, the dollar should appreciate
a. True b. False Indicate whether the statement is true or false
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Refer to the above figure. Which panel represents the long-run supply curve for a decreasing-cost industry?
A. Panel A B. Panel B C. Panel C D. Panel D
Which of the following is an example of a long-run adjustment?
A) Your university offers Saturday morning classes next fall. B) Ford Motor Company lays off 2,000 assembly line workers. C) A soybean farmer turns on the irrigation system after a month long dry spell. D) Walmart builds another Supercenter.