During the Stock Market Crash of October 1987,the Fed

question 92

Multiple Choice

During the stock market crash of October 1987,the Fed

• A) nearly created a financial panic by not acting as a lender of last resort.
• B) nearly created a financial panic by raising the discount rate.
• C) prevented a financial panic by raising reserve requirements.
• D) prevented a financial panic by providing liquidity to the financial system.

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Definitions:

Investment

The allocation of resources, such as capital, with the expectation of generating an income or profit.

Days

The measurement of time, specifically the period of time that constitutes a 24-hour day.

Interest

A fee applied to borrowed funds, usually calculated as a percent of the principal amount.

Loan

A sum of money that is borrowed, typically from a financial institution, and is expected to be paid back with interest.