a. Based on the functions of the banking system, give reasons why governments bail out banks during an economic crisis?
b. Is the World heading for a recession? Explain the conditions under which the world can be classified as being in a recession as COVID-19 persists. Explain linking the pandemic to the various stages of a recession.
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The bailout is a term used for extension of financial support to a country or a company facing a potential threat of bankruptcy. A bailout can take forms of loans, bonds, cash, or stock purchases. A bailout might or might not require reimbursement and is generally accompanied by greater government oversee and regulations.
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