Recall the Application About the Fed's Response to the Collapse

question 32

Multiple Choice

Recall the Application about the Fed's response to the collapse of the investment house Bear Stearns as well as its handling of the 2008 financial crisis with respect to other financial institutions to answer the following question(s) .
-According to this Application, the Fed responded to the financial crisis by continuing to develop new programs. One example of this was its announcement that it would now purchase commercial paper, which is the short-term debt of corporations. This is an example of the Fed acting as a

• A) medium of exchange.
• B) lender of last resort.
• C) store of value.
• D) unit of account.

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Definitions:

Rationalizations

The process of providing plausible reasons to justify behavior that might otherwise be unacceptable.

Legal Code

A comprehensive system of laws arranged by subject matter in a systematic and codified manner, often used by jurisdictions to organize their legal principles and statutes.

Corrective Action

Measures taken to identify, eliminate, and prevent the recurrence of errors or problems in a process.

Work Group Identities

The collective sense of belonging and identity shared among members within a workgroup based on common goals or tasks.