Question: 7. Which relationship would you expect to exist between measures of corruption and living standards at the country level ? Explain by which channel corruption

7. Which relationship would you expect to exist between measures of corruption and living standards at the country level ? Explain by which channel corruption might affect living standards.

8. Would you recommend the adoption of a system of deposit insurance, like the FDIC in the United States, in a country with weak institutions, prevalent corruption, and ineffective regulation of the financial sector ?

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