Q&A ASSIGNMENT.edited.docx - Running head QUESTION AND ANSWER ASSIGNMENT Questions and Answer Assignment Student\u2019s Name Institutional Affiliation

Q&A ASSIGNMENT.edited.docx - Running head QUESTION AND...

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Running head: QUESTION AND ANSWER ASSIGNMENT 1 Questions and Answer Assignment Student’s Name Institutional Affiliation
QUESTION AND ANSWER ASSIGNMENT 2 Question one In economics, moral hazard is a term that refers to the incentives are given to an entity as a result of taking unusual risks in despairing seek for profits before the contract is being settled. Moral hazard plays a great role when two business entities decide on an agreement ( Cvitanić et al., 2017) . For instance, each of the business entities in the deal stands a chance to benefit from acting contrary to what is stated in the contract. In such a case, the party involved in the agreement does not suffer the consequences of taking unusual risks. Moral hazard is most prevalent in the lending and insurance sectors. It can also be existent in employee-employee relationships. The critical purpose of the deposit insurance agency is to create confidence in the banking system and the process champions for financial stability. Federal Deposit Corporation (FDIC) is an independent body created by Congress to maintain confidence in the national economic system and attain financial stability. Deposit insurance, such as FDIC, has a bountiful of benefits. Despite FDIC having lots of benefits, it is accompanied by moral hazards side effects. Federal Deposit Corporation creates a moral hazard by giving parties incentives to increase risk-taking ( Mousa and Pinsker, 2020) . In this case, the depositors and creditors are made to believe that they are adequately protected from losses. Furthermore, the depositors and creditors are made to believe that the financial institution will not fail them. Thus this makes them not monitor their investment in that commercial agency. Many will wonder what it means by saying that a currency is strong or weak. Let me start by defining them; a strong currency has more value than another country's currency. On the other hand, a currency is said to be weak if its value is less valuable than another country's currency. The strength of the United States Dollar is critically important in determining global growth. For instance, a strong dollar hinders global growth.
QUESTION AND ANSWER ASSIGNMENT 3 Conversely, a weaker dollar helps accelerate and boost global growth. The strength of the U.S dollar has been on the twist since 1990 to 2019. Below is a graph showing the variation in the dollar from 19
QUESTION AND ANSWER ASSIGNMENT 4 Question two Many countries around the world have a severance fund program. A severance fund is a payment that an employee receives from the employer after the employment is over. For instance, this pay can be acquired after an employee has retired or the employment is terminated for various reasons. Furthermore, the payment also applies in cases where an employee willingly resigns from the work. Generally, the amount of severance pay to employees is dependent on the number of years that the employee has been working. Also, it is dependent on the amount of the first salary received by the employee. The severance fund was instituted majorly to protect newly

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