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 38 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
Wow, this really help

covalentbond

  • Member
  • Posts: 336
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Astigmatism is the most common vision problem. It may accompany nearsightedness or farsightedness. It is usually caused by an irregularly shaped cornea, but sometimes it is the result of an irregularly shaped lens. Either type can be corrected by eyeglasses, contact lenses, or refractive surgery.

Did you know?

Every flu season is different, and even healthy people can get extremely sick from the flu, as well as spread it to others. The flu season can begin as early as October and last as late as May. Every person over six months of age should get an annual flu vaccine. The vaccine cannot cause you to get influenza, but in some seasons, may not be completely able to prevent you from acquiring influenza due to changes in causative viruses. The viruses in the flu shot are killed—there is no way they can give you the flu. Minor side effects include soreness, redness, or swelling where the shot was given. It is possible to develop a slight fever, and body aches, but these are simply signs that the body is responding to the vaccine and making itself ready to fight off the influenza virus should you come in contact with it.

Did you know?

Intradermal injections are somewhat difficult to correctly administer because the skin layers are so thin that it is easy to accidentally punch through to the deeper subcutaneous layer.

Did you know?

The human body produces and destroys 15 million blood cells every second.

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

Common phlebotomy issues. Common phlebotomy issues.
Metabolic pathways involved in the breakdown of proteins for energy. Metabolic pathways involved in the breakdown of proteins for energy.
The processes involved in urine formation. The processes involved in urine formation.
Sampling Issues Sampling Issues
Brain Areas Involved in Memory Brain Areas Involved in Memory
E9-23 Prepare income statements Explain the difference in operating income E9-23 Prepare income statements Explain the difference in operating income
Video: Component of feedback systems & Communication and regulation of body systems

For a complete list of videos, visit our video library