Discuss in detail the three things mentioned in the text that the Federal Reserve did to deal with the 2007-2009 financial crisis
To deal with the financial crisis of 2007-2009, the Fed did the following:
(1 ) Created the term auction facility (TAF) program which gave banks an alternative source of loans from the Fed. In this program, the Fed determines a set amount of credit that it wants to extend, and then banks bid on the funds. The interest rate paid by the banks is determined through this auction process, which has led to banks being able to borrow funds at a rate that is lower than that of discount loans. The Fed has also informed banks that there is no stigma attached to borrowing through the TAF program (as opposed to discount loans which sometimes signify to the Fed and the financial community that a bank is in trouble).
(2 ) Extended its lender of last resort function to institutions other than banks.
(3 ) Purchased securities on the open market from nonbanks, and broadened the types of securities that it purchased (including mortgage-backed securities).
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Elijah has just eaten his second popsicle. Using the concept of marginal utility, we can say:
A. the utility he will gain from his third will reduce his total utility. B. the utility he will gain from his third will not reduce his total utility. C. the utility he will gain from his third will be less than that of his second but will increase his total utility. D. the utility he will gain from his third will be less than that of his second and may reduce his total utility.
Suppose the cost of producing copper tubing is $1 per foot. If production costs were measured on the vertical axis and quantity of copper tubing were measured on the horizontal axis, which of the following lines would have the smallest slope?
a. a line representing the quantity of tubing measured in inches b. a line representing the quantity of tubing measured in feet c. a line representing the quantity of tubing measured in yards d. the 45-degree line e. any vertical line
All of the following apply to the description of a market in equilibrium except: a. quantity supplied equals quantity demanded. b. the intersection of the supply and demand curves. c. no excess supply exists
d. no excess demand exists. e. the price of the good is falling.
If something is to serve as money it must be a store of value. This means that it must
A. be divisible. B. be liquid. C. be the standard by which all goods are compared in setting prices. D. hold its purchasing power over time.