In the wake of the global financial crisis, there has been a lot of discussion about whether

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In the wake of the global financial crisis, there has been a lot of discussion about whether banking is 'socially useful'. Use the simple model of the macro-economy and the financial system to explain the benefits to the economy of the banking system and its role in stabilization policy. What factors are not considered in the basic model which could lead to the banking system destabilizing the economy? Could these activities be considered socially useful?

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