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8) a) Why are deposit insurance and other types of government safety nets important to the health of the economy? b) Suppose that you have

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8) a) Why are deposit insurance and other types of government safety nets important to the health of the economy? b) Suppose that you have $300,000 in deposits at a bank. After careful consideration, the FDIC decides that this bank is now insolvent. Which method would you like to see the FDIC apply? What if your deposit were $200,000? 9) A lottery claims its grand prize is $ 8 million, payable over 4 years at $2,000,000 per year. If the first payment is made at the end of rst year. what is this grand prize really worth? Use an interest rate of 4%

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