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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Definitions:

Sales Discount

A reduction in the price of goods or services offered to customers, usually to encourage prompt payment.

Perpetual Inventory System

This technique documents transactions of inventory sales or purchases in real-time, utilizing computer-based point-of-sale systems and software designed for managing company assets.

Physical Inventory

The process of counting the actual items of inventory in stock to verify records and accounts.

Single-Step Income Statement

A form of income statement in which the total of all expenses is deducted from the total of all revenues.