The Government voted to extend the debt ceiling until December and the market soared on the annoucement. Based on our discussions of the debt ceiling and its impact, answer the following.

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

- Does the fact that we have moved close to default have a direct cost impact on a large bank. Explain why or why not.

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