So the government voted to extend the debt ceiling until December and the market soared on the announcement. Based on our discussions of the debt ceiling and its impacts, answer the following questions:

1. Using the basic accounting equation, show and discuss how a default on US debt could affect large banks like a JP Morgan.

2. Does the fact that we have moved close to default have a direct cost impact on a large bank like JP Morgan? Explain why or why not.

2. If the US were to default on its debt, discuss the (1) possible consequences to the US economy and (2) the likely consequences to the US economy.