Economics Today, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (18th Edition) (Pearson Series in Economics)
18th Edition
ISBN: 9780134004624
Author: Roger LeRoy Miller
Publisher: PEARSON
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Question
Chapter 15, Problem dFCT
To determine
To state: the reason for which a taxpayer loan to the FDIC be equal to the “backing” insured deposits with the “full faith and credit” of the government.
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Chapter 15 Solutions
Economics Today, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (18th Edition) (Pearson Series in Economics)
Ch. 15 - Prob. 15.1LOCh. 15 - Prob. 15.2LOCh. 15 - Prob. 15.3LOCh. 15 - Prob. 15.4LOCh. 15 - Prob. 15.5LOCh. 15 - Prob. 15.6LOCh. 15 - Prob. aFCTCh. 15 - Prob. bFCTCh. 15 - Prob. cFCTCh. 15 - Prob. dFCT
Ch. 15 - Prob. 1CTQCh. 15 - Prob. 2CTQCh. 15 - Prob. 1FCTCh. 15 - Prob. 2FCTCh. 15 - Prob. 1PCh. 15 - Prob. 2PCh. 15 - Prob. 3PCh. 15 - Prob. 4PCh. 15 - Prob. 5PCh. 15 - Prob. 6PCh. 15 - Prob. 7PCh. 15 - Prob. 8PCh. 15 - Prob. 9PCh. 15 - Prob. 10PCh. 15 - Prob. 11PCh. 15 - Prob. 12PCh. 15 - Prob. 13PCh. 15 - Prob. 14PCh. 15 - Prob. 15PCh. 15 - Prob. 16PCh. 15 - Prob. 17PCh. 15 - Prob. 18PCh. 15 - Prob. 19P
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- From an economics standpoint, the main benefit of a healthy banking industry is the fact that banks themselves make a tremendous profit, allowing the owners of banks as well as their employees to have high incomes. banks force entrepreneurs to pay high interest rates, which contributes to solving the problem of wealth inequality. banks are able to minimize asymmetric information and adverse selection problems, which allows them to transfer idle funds to more productive ends in a cost-efficient manner. private banks help keep inflation under control.arrow_forwardWhich of the following is NOT TRUE about Insurance companies? *a. They are non-depository institutions that does not accept deposits.b. Collects deposits like banks and reinvests them in profitable financial securities.c. Collects premiums from clients for payment of policies.d. Clients transfer risks to insurance companies in exchange for premiums paid.e. None of the choices.arrow_forwardWhich of the following is not a function of financial intermediaries? A Deal with asymmetric information problems B. Reduce the exposure of investors to risk C. Promote adverse selection after transactions. D. Lower transaction costsarrow_forward
- What do the authors mean when they state that financial intermediaries can achieve economies of scale with respect to transaction costs? A. Intermediaries can spread transaction costs across larger transaction volumes, so the cost per unit is lower. B. Intermediaries tend to specialize in certain types of transactions, so their costs are lower because they operate at lower volume than other types of financial firms.arrow_forwardIf federal deposit insurance is provided to banks at no cost to them, who pays when an insured depository institution fails and its depositors are reimbursed for the full amount of their deposits?arrow_forwardIf not for a great deal of corporate wrongdoing, there would probably be no FCPA. True or False?arrow_forward
- Is Bitcoin legal tender anywhere in the world? Explain and cite your source?arrow_forwardIf bad credit risks are the ones who most actively seek loans, then financial intermediaries face (a) a moral hazard problem. (b) an adverse selection problem. (c) a free-riding problem. (d) no problem at all.arrow_forwardWhich of these is an example of asymmetric information in banking? a. Borrowers and lenders have different expectations about financial markets. b. Borrowers' goals are short-term while lenders' goals are long-term. c. Lenders know more about the capacity of borrowers to repay loans than borrowers. d. Borrowers know more about their capacity to repay loans than lenders.arrow_forward
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