The Fed Sometimes Acts as a Lender of Last Resort

question 185

Multiple Choice

The Fed sometimes acts as a lender of last resort.This means that

• A) individuals can borrow from the Fed when the President declares a national disaster
• B) individuals can try to borrow money from the Fed if they are unable to borrow from a bank
• C) banks can always go to the Fed for reserves in order to purchase more government bonds
• D) banks can always go to the Fed for reserves to meet their obligations to depositors
• E) business firms can try to borrow money from the Fed they are unable to borrow from a bank