By acting as a lender of last resort during a bank panic, the Federal Reserve enables banks to
A) encourage the public to borrow directly from the Fed to alleviate the panic.
B) call in their loans from their customers to restore faith in the banking system.
C) borrow increasingly large amounts from the Fed, which will reduce the public's faith in the banking system.
D) satisfy customers' desires to withdraw money and eventually restore the public's faith in the banking system.
D
You might also like to view...
Which of the following is a primary objective of macroeconomic policy?
A) achieving a zero rate of unemployment B) achieving a zero rate of inflation C) stabilizing economic activity D) all of the above E) none of the above
Whites are about equally divided over the cause for black poverty being racial inferiority or discrimination
Indicate whether the statement is true or false
If the marginal propensity to save (MPS) is 1/8, the value of the simple spending multiplier is: a. 8
b. 1/8. c. 2. d. 1/2. e. 4.
There are five schools of economic thought that approach the analysis of employment and inflation quite differently. They are
a. classical, Keynesian, neo-Keynesian, rational expectations, and neo-classicists b. classical, Keynesian, neo-Keynesian, rational expectations, and supply-side c. classical, Keynesian, classical-Keynesians, rational expectations, and supply-side d. classical, Keynesian, neo-Keynesian, adaptive expectations, and supply-side e. neo-classical, Keynesian, neo-Keynesian, rational expectations, and supply-side