When the Central Bank Acts as a Lender of Last

question 59

Multiple Choice

When the central bank acts as a lender of last resort, it:

• A) requires the borrower to put up collateral.
• B) is able to confiscate some of the borrower's assets.
• C) requires voting rights on the borrower's board of directors.
• D) takes over ownership of the borrower.

---

Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance.

Variable Costs

Financial outlays that directly correspond to the volume of production or sales, encompassing costs for raw materials and direct labor.

Sales

The transactions involving the exchange of goods or services for money, forming the revenue of a company.