What is meant by the term "lender of last resort?" In what circumstances might the Fed be a lender of last resort?
A "lender of last resort" is a lender to those who cannot borrow anywhere else. The Fed might loan funds to a solvent bank that is experiencing a bank run and so doesn't currently have enough cash on hand to meet depositors' demands.
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Holding nominal money balances constant, a decrease in the price level
A) causes the real value of the money balances to increase, thereby increasing the interest rate. B) generates a reduction in the value of the money balances, leading to higher interest rates and a decrease in total planned real expenditures. C) causes the real value of the money balances to increase, in turn increasing total planned real expenditures. D) causes the real value of the money balances to decrease, in turn decreasing total planned real expenditures.
Refer to Scenario 2. What are the units of measurement for the standard error of the estimate?
What will be an ideal response?
When the economy strengthens, following the period of quantitative easing, the Federal Reserve plans to keep a lid on money growth by
A) increasing reserve requirements. B) selling dollars in foreign-exchange markets. C) increasing the interest rate paid on reserves. D) buying dollars in foreign-exchange markets.
The CARD Act, which tells credit card holders how long it will take to pay off their debt if they only make minimum payments, and how much they need to pay in order to pay off the debt in three years, is an example of:
A. disclosing information in more usable ways. B. choice architecture that nudges people toward better decisions. C. how the presentation of information can affect people's choices. D. All of these statements are true.