Economic on money and banking

  Order Description       1. Suppose you are the lender of last resort and an institution approaches you for a loan. You assess that the institution has $600 million in assets, mostly in long term loans, and $400 million in liabilities. The institution is experiencing unusually high withdrawal rates on its demand deposits and is requesting a loan to tide it over. Walk us through your thought process in deciding whether or not you would grant the loan.