Banks and the Economy

Write a one-page summary explaining how adverse selection and moral hazard contributed to the Great Depression.

The federal deposit insurance corporation(FDIC) does which 3 things? a. Directly manges every bank in the unitwd states b. Performs tests on banks to see if they are prepared for emergencies c. Takes over failing banks and sells them to better managed banks d. uses tax payer money to help out struggling banks e. Insures deposits in every bank account up to $250,000

How many banks failed in 1937? How it is possible to prevent bank failure?

The government, business and household sectors are all suppliers of funds into the financial system. Is it true or false?

Discuss the role of banks as financial institutions that fuel the economic growth of a nation.

the bank makes small loans (known as microcredit) to the impoverished without requiring collateral. which bank does it belong too?

"People are poor because they don't have very much money. Yet, central bankers keep money scarce. If people had more money, poverty could be eliminated." Evaluate this view. Do you think it reflects sound economics?

Please discuss the global issues associated with banking system. What are some factors that a bank must consider before expanding internationally?

5 1. In no less than 300 words, explain how banks can create money.