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In a world without deposit insurance, what are some of the mechanisms that would arise to punish bank managers who acted irresponsibly?
Who pays when an insured depository institution fails and its depositors are nonetheless reimbursed for the full amount of their deposits?
Was the Fed justified in targeting specific sectors of the economy during the financial panic of 2008? Why or why not?
The Fed was given great power in 1913 to undertake potentially beneficial actions. Did this also give it great power to engage in potentially harmful actions?
In the long run, if the Fed fails to remove the excess reserves from banking system, what will the banks do with them? What are the implications for inflation?
How did this change likely alter the incentives of banks to lend out excess reserves? What are the implications for aggregate demand? Explain.
If the Fed had not injected reserves into the banking system in 2008, what would have been the consequences for the banks and for aggregate demand?
If the Fed continued to pay interest on required reserves but stopped paying interest on excess reserves, how would bank lending incentives be changed?
How did the Fed's long-standing policy of not paying interest on bank reserves act much like a tax on bank reserves?
What does the existence of the Social Security system do to the incentive of a worker to save for his or her retirement?
How is the incentive to retire prior to age 70 affected by this provision for benefit increments, relative to a system in which benefits were not raised?
What is the effective marginal tax rate imposed by the Social Security system on such earnings from work? Explain.
Analyze how each of the following hypothetical policy change would affect people's decision to retire. Would the change induce people to retire sooner or later?
What do you think explains the ability of older people to win political battles with younger people?
Why can you suggest why states would have this rule but the federal government would not?
If the United Kingdom decided to switch from the pound to the euro, how might this decision affect the value of the euro in foreign exchange markets?
Is there any reason to believe that a trade deficit with any particular nation is of particular importance? If South Carolina runs a trade deficit with Texas.
What would have happened to the rebuilding effort if European politicians had sought to reduce their trade deficit with the US by imposing high import tariffs?
What would have been the likely consequences for the development of the American economy between the Civil War and World War I.
How does the concept of buy local relate to concerns about trade deficits on an international basis?
Why can't competing producers in different states prevent imports into their own state?
What effect does such policy have on our imports of foreign goods and thus on employment in industries that compete with imports?
Who gains and who loses from import restrictions? In answering, you should consider both consumers and producers in both the country that imposes restrictions.
How do you predict that members of Congress from coastal states would vote on proposals to restrict international trade?
If it would be cheaper to give each steelworker $375,000 per year in cash than impose. Why do we have the import restrictions rather than the cash payments?