The First Test of the Federal Reserve as Lender of Last

question 85

Multiple Choice

The first test of the Federal Reserve as lender of last resort occurred with the:

• A) attack on Pearl Harbor by the Japanese.
• B) widespread failures of Savings and Loans in the 1980's.
• C) introduction of flexible exchange rates in the U.S. in 1971.
• D) stock market crash in 1929.

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Definitions:

Accounting Break-even

Accounting Break-even is the point at which a company's revenues exactly cover its expenses, excluding financing costs and taxes.

Contribution Margin

The selling price per unit minus the variable cost per unit, used to determine how sales affect net income.

Sales Projections

Estimates of the future sales revenue of a company, which are often based on historical sales data, market trends, and other relevant factors.

NPV

Net Present Value, a calculation used to determine the value of an investment by discounting future cash flows to their present value.