How does federal deposit insurance encourage greater risk taking by banks?  Could the banking system function without government deposit insurance?  How?

Question

How does federal deposit insurance encourage greater risk taking by banks?  Could the banking system function without government deposit insurance?  How?

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Economics

Other

Related Economics Q&A

Find answers to questions asked by students like you.

Q: What is the difference between scarcity and poverty?

A: Poverty:Poverty refers to the economic situation of the people in which they are not able to afford ...

Q: Question 11 Consider a call center with production function f(L,K)=30L+300K, where L is units of lab...

A: Given,Production function f (L, K) = 30L+300KWhere, L is the units of labor and K is the units of ca...

Q: Give a solution to fix a serious national recession

A: The recession is a situation of declining the Gross Domestic Product of the economy due to the decli...

Q: What are the main causes of inefficiency in most firms? Should firms use accounting profits or econo...

A: Inefficiency: Inefficiency refers to the lack of innovation which results in the high cost of produc...

Q: plans are underway for a new stadium for a baseball team. City officials question the number and pro...

A: Given fixed cost = $4,500,000 , Variable cost = $ 150,000Customer may Purchase at $300,000

Q: Firms A and B are contemplating whether or not to invest in R&D. Each has two options: “Invest” ...

A: The analysis of the outcomes of strategies available to players, when the choice of strategy of one ...

Q: Using the aggregate demand and aggregate supply model, explain the effects of the following on price...

A: The decision to revamp the public transportation will increase government spending and raise the agg...

Q: 10.We discussed four problems that complicate the application of fiscal policy.    a. List and thoro...

A: Four problems associated with Fiscal Policy are:Policy LagsThe question in this context is related w...

Q: Classify each scenario based on whether it increases or decreases aggregate demand (AD) Increases Ag...

A: The total demand of all goods and services produced in an economy at given prices is called aggregat...

Q: (Table: Profit-Maximizing Monopolist) Refer to the table. When this monopolist sells 8 units, its av...

A: The formulae used in the following table are:Total Revenue = Price * QuantityMarginal Revenue = TRn-...

Q: In order to produce a new product, a firm must lease equipment at a cost of $50,000 per year. The ma...

A: The highest variable cost for break even on this project can be calculated as follows.

Q: Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has ...

A: The market is headed by the largest manufacturer of the toys and the largest one at present is the F...

Q: Question 2 Suppose that the cost function of a firm is C(q)=4q. Suppose that this is the only firm i...

A: Producer surplus is an advantage taken by the producer due to the variations in the price received a...

Q: Which of the following statements best describes how individuals maximize their utility given a cons...

A: Individuals maximize their utility when the budget constraint is tangent to the indifference curve, ...

Q: Do you expect that China, then India, will follow the growth paths of Japan and South Kora? What fac...

A: Economic growth of a country is the increase in the inflation-adjusted price value of goods and serv...

Q: In year one,  Adam earns $1,000 and saves $100. In year 2, Adam gets a $500 raise so that he earns a...

A: MPC or marginal propensity to consume is the change in consumption of a person due to change in his ...

Q: Assume you are an economist at Ministry of Economy. During the budget consultations, a participant s...

A: The interaction of labor demand by the business firms and labor supply by the workforce of the econo...

Q: Most firms in the apparel and footwear industries choose to outsource production to countries where ...

A: Apparel and footwear industry is labor-intensive and most of their cost includes wages paid to labor...

Q: A constitutional amendment has been proposed that would require Congress to balance the budget each ...

A: Balanced budget is when the government expenditures is equal to its revenue.It is not possible to ac...

Q: Positive externality No externality Negative externality Answer Bank The U.S. government decides to ...

A: Click to see the answer

Q: Saved Help Save&Exit Submit Quantity Supplied Quantity Price Demanded $6 300 $1 10 250 $2 50 180 $3 ...

A: If there is no tax, the market will sell the product at the equilibrium price.

Q: Suppose you are a Social Security recipient. In 2006 you receive $700 per month in Social Security b...

A: a) Given: Social security benefits per month = $700Cost of living adjustment = 3.2%Therefore, monthl...

Q: b. Explain in some detail the 4 phases of the business cycle, Please don’t include Depression as one...

A: Business Cycle: It refers to the fluctuation (rise or fall) in the economic trade that occurs over t...

Q: Question 13 Consider a firm whose cost function when both L and K are variable is shown in the figur...

A: Total cost: It refers to the total cost incurred while producing the commodity.Average Total cost re...

Q: How did china's economy grow quickly overtime during 1975-2005?

A: Answer -  China economy grow quickly during 1975-2005 due to following reason-1. Large Human resourc...

Q: Why is there an increased incentive for collusion among oligopoly firms?

A: The oligopoly market is a market structure which is characterized by the presence of a small number ...

Q: Why is bank run contagious?

A: The word contagious refers to a cause that will have an impact over others where as the term bank ru...

Q: How do minimum wages affect wages, employment, and unemployment?

A: Click to see the answer

Q: Assume that a firm accepts the following price_demand relationship as being a realistic representati...

A: The given price-demand function of the market is as follows:

Q: draw graphs to illustrate the difference between a decrease in quantity supplied and a decrease in s...

A: The figure 1 shows decrease in quantity supplied and a decrease in supply for condominiums

Q: How can businesses determine the attractiveness of a foreign market?

A: The term market attractiveness is a concept that practices many factors to determine whether or not ...

Q: Question 1 Suppose that the cost function of a firm is C(q)=4q. Suppose that this is the only firm i...

A: There is monopoly in the market because there is single seller. The profit maximizing quantity in th...

Q: Suppose the California legislature passed a sweeping law to lower the number of regulations for buil...

A: Click to see the answer

Q: a) Suppose you put $350 into a bank account today. Interest is paid annually and the annual interest...

A: (a)Initial deposit = $350Interest rate = 6 percent per annumTime period = 4 yearsTo determine: Futur...

Q: An individual sets aside a certain amount of his income per month to spend on his two hobbies, colle...

A: In economics, the demand curve is used to graphically represent the relationship between quantity de...

Q: What are some weaknesses of the five modes of entry?

A: Some weaknesses of the five modes of entry are:Exporting – There is low control, local knowledge is ...

Q: List and explain 4 types of transactions that would not be included in GDP and why they should be om...

A: Hey, Thank you for the question. According to our policy we can only answer 1 question per session. ...

Q: If the price of one of the products is associated with indifference curves increase, all else the sa...

A: An indifference curve is a graphical representation of different combinations of two commodities tha...

Q: For each government action, indicate the type of government activity and justification. Instructions...

A: a) New York city bans smoking in restaurants – EXTERNALITY.  Smoking in public places creates negati...

Q: Douglas Fur is a small manufacturer of fake-fur boots in Dallas. The following table shows the compa...

A: The following formulas are being used to compute the table where Marginal cost (MC) is the differenc...

Q: The Bank of England will prevent members of its interest rate-setting committee from publishing indi...

A: The opinions of the decision-maker have great impact on investors and general consumers. Any opinion...

Q: Utility function U(X,Y)=(x^(3/4))(Y^(1/4)) 1)Suppose Px=2, Py=1, and Income is 100. What are the new...

A: 1) Given the utility function u(X,Y) = (x^(3/4))(y^(1/4)), prices of good X and good Y as Px=2 and P...

Q: What is a perceptual map?

A: There are many goods and services available in the market and the likelihood of the consumer towards...

Q: Based on the five modes of entry into an international market, what options does IKEA have in enteri...

A: The Swedish company IKEA has the aim of providing ready to assemble furniture to the consumers globa...

Q: Explain some reasons why consumption spending and gross private domestic investment spending are so ...

A: GDP (Gross Domestic Product): It refers to the total of market value of all produced final goods and...

Q: For which of the following problems can well-designed public policy enhance economic efficiency? bo...

A: Economic efficiency is achieved where all the factors of production and goods are allocated to the m...

Q: Suppose the California legislature passed a sweeping law to lower the number of regulations for buil...

A: In this case sweeping law will empowers California government to make necessary law and give proper ...

Q: What is the difference between total and marginal product?     Total product is the output pro...

A: To determine the difference between Total Product (TP) and Marginal Product (MP).

Q: 1. Calculate the inflation rate. 2. Re-do parts b)-d), but use year 2 as the base year. How do your ...

A: Hi there! Thankyou for the question. As per the honor code, we are authorized to do one question at ...

Q: It is common for supermarkets to carry both generic (store-label) and brand-name (producer-label) va...

A: Click to see the answer