« previous next »

Author Question: What problem is addressed by a government safety net for the banking system? What problem is caused ... (Read 70 times)

EY67

  • Hero Member
  • *****
  • Posts: 531
on: Jun 30, 2018
What problem is addressed by a government safety net for the banking system? What problem is caused by the safety net?
 
  What will be an ideal response?

Question 2

Credibility is not important in ________.
 
  A) new Keynesian and traditional Keynesian theory
  B) real business cycle and traditional Keynesian theory
  C) real business cycle and new Keynesian theory
  D) traditional Keynesian, new Keynesian and real business cycle theory


FergA

  • Sr. Member
  • ****
  • Posts: 352
Reply #1 on: Jun 30, 2018
Answer to Question 1

The safety net protects good banks from being abandoned by uninformed depositors, so banks can continue to channel funds. The safety net means that bad banks need not worry that depositors will become aware of or care about risky practices, so the incentive to remain prudent is weakened (moral hazard).

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

IgA antibodies protect body surfaces exposed to outside foreign substances. IgG antibodies are found in all body fluids. IgM antibodies are the first type of antibody made in response to an infection. IgE antibody levels are often high in people with allergies. IgD antibodies are found in tissues lining the abdomen and chest.

Did you know?

Aspirin is the most widely used drug in the world. It has even been recognized as such by the Guinness Book of World Records.

Did you know?

Fatal fungal infections may be able to resist newer antifungal drugs. Globally, fungal infections are often fatal due to the lack of access to multiple antifungals, which may be required to be utilized in combination. Single antifungals may not be enough to stop a fungal infection from causing the death of a patient.

Did you know?

After 5 years of being diagnosed with rheumatoid arthritis, one every three patients will no longer be able to work.

Did you know?

Illness; diuretics; laxative abuse; hot weather; exercise; sweating; caffeine; alcoholic beverages; starvation diets; inadequate carbohydrate consumption; and diets high in protein, salt, or fiber can cause people to become dehydrated.

Lymphatic system. Lymphatic system.
Lymphatic system. Lymphatic system.
A typical port fuel-injection system squirts fuel into the low pressure (vacuum) of the intake ... A typical port fuel-injection system squirts fuel into the low pressure (vacuum) of the intake ...
How to manually solve a linear system with three variables without matrices (Question 1 of 2) How to manually solve a linear system with three variables without matrices (Question 1 of 2)
Microbiology with Diseases by Body System, 3e (Bauman) Microbiology with Diseases by Body System, 3e (Bauman)
Complete Digestive System: Bird Complete Digestive System: Bird
Video: ribosome

For a complete list of videos, visit our video library