This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Explain the issues involved with the Fed acting as a lender of Last Resort (LLR). What will be an ... (Read 25 times)

mp14

  • Hero Member
  • *****
  • Posts: 534
on: Jun 30, 2018
Explain the issues involved with the Fed acting as a lender of Last Resort (LLR).
 
  What will be an ideal response?

Question 2

What do you think about dollarization?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Bsand8

  • Sr. Member
  • ****
  • Posts: 327
Reply #1 on: Jun 30, 2018
Answer to Question 1

On the one hand, LLR enables the Fed to avoid panic and disturbance to proper functioning of financial markets. On the other hand, using the policy may cause problems of moral hazard.

Answer to Question 2

This is an open question. The answer is probably a bad idea unless in the very short run. Students should talk about the loss of seigniorage and the gain in credibility against devaluation, which should lead to lower domestic interest rates. Students should mention the importance of political will to repair the fundamental economic weaknesses of the country.


mp14

  • Member
  • Posts: 534
Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it

bassamabas

  • Member
  • Posts: 294
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

About 60% of newborn infants in the United States are jaundiced; that is, they look yellow. Kernicterus is a form of brain damage caused by excessive jaundice. When babies begin to be affected by excessive jaundice and begin to have brain damage, they become excessively lethargic.

Did you know?

The first-known contraceptive was crocodile dung, used in Egypt in 2000 BC. Condoms were also reportedly used, made of animal bladders or intestines.

Did you know?

Approximately 500,000 babies are born each year in the United States to teenage mothers.

Did you know?

Most childhood vaccines are 90–99% effective in preventing disease. Side effects are rarely serious.

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Regions of the Hypothalamus Involved in Eating and Metabolism Regions of the Hypothalamus Involved in Eating and Metabolism
Medical assistants are often involved in confidential conversations between the physician and the pa Medical assistants are often involved in confidential conversations between the physician and the pa
Common phlebotomy issues. Common phlebotomy issues.
What Are the Consequences of “Not Getting Involved”? What Are the Consequences of “Not Getting Involved”?
The basal ganglia are clusters of gray matter that control learned movement and are involved with ... The basal ganglia are clusters of gray matter that control learned movement and are involved with ...
Surface molecules involved in the interaction between an antigen-presenting cell and a CD4+ T cell. Surface molecules involved in the interaction between an antigen-presenting cell and a CD4+ T cell.
Video: Lactation and Breast Feeding

For a complete list of videos, visit our video library