Provide One Argument in Favour of and One Argument Against

question 31

Essay

Provide one argument in favour of and one argument against each of the following proposals to prevent future financial crises.a.require shadow banks to hold more capital
b.give the deposit-insurance agency resolution authority over shadow banks
c.impose higher capital requirements on larger banks
d.prohibit banks from making speculative investments

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Definitions:

Marginal Decision Making

The process of evaluating the additional benefits and costs of a decision when considering a small change in production or consumption.

Value Meal

A meal or combination of food items offered at a fast-food restaurant for a lower price than if the items were purchased separately.

Medium Fries

Generally refers to a portion size of fried potatoes offered in fast food or restaurant settings, situated between small and large size options.

Marginal Benefit

The additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.