1. Do you think that eliminating or limiting the amount of deposit insurance wou
ID: 1122077 • Letter: 1
Question
1. Do you think that eliminating or limiting the amount of deposit insurance would be a good idea? Explain your answer. 2. A German sports car is selling for 70,000 euros. What is the dollar price in the United States of the German car if the exchange rate is .90 euro per dollar? 3. The International Monetary Fund stands ready to help nations facing monetary crises. Go http://www.imf.org. Click on the tab labeled "About the IMF." What is the stated purpose of the IMF? How many nations participate, and when was it established?Explanation / Answer
1. No it may not be a good idea as it may reduce the moral hazard on part of bank , however results into financial instability of banks
2. As 0.9 euro per dollar , then the dollar price of the Germany Car in US :
70000÷ 0.9=$77777.78
3. IMF was established in July 1944 at UN Bretten wood conference in NewHamshire US with 44 countries.
Main objective is to ensure financial stability. Currently there are 189 member countries, providing financial help is the core objective of IMF. It promotes oi international monetary cooperation make resource available to the member nations facing balance of payment issues.
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