When the Fed Makes a Discount Loan, the Impact on the Banking

question 31

Multiple Choice

When the Fed makes a discount loan, the impact on the Banking System's balance sheet will reflect:

• A) an increase in liabilities with no change in assets.
• B) an increase in assets and a decrease in liabilities.
• C) a decrease in assets and an increase in liabilities.
• D) an increase in assets and liabilities.

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Definitions:

Field Experiment

An experiment that is conducted in a natural setting rather than in a laboratory setting.

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Generalization

The process of applying the results from studies to wider contexts outside of the original research settings.