The Concept of "Lender of Last Resort" Is That When

question 37

Multiple Choice

The concept of "lender of last resort" is that when

• A)lending decreases, the Fed will be the last to resort to higher interest rates.
• B)borrowing increases, the Fed will be the last to increase lending.
• C)commercial banks are hesitant to lend, the Fed will step in and increase reserves.
• D)a borrower has tried everyone else, the Fed will lend directly to them.

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