If There Is a Recession, the Fed Would Most Likely

question 184

Multiple Choice

If there is a recession, the Fed would most likely:

• A) encourage banks to provide loans by lowering the discount rate.
• B) encourage banks to provide loans by raising the discount rate.
• C) restrict bank lending by lowering the discount rate.
• D) restrict bank lending by raising the discount rate.
• E) restrict bank lending by lowering the federal funds rate.

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Definitions:

Current Assets

Assets that are expected to be converted into cash or used up within one year or the operating cycle, whichever is longer.

Current Liabilities

Short-term financial obligations that are due within one year from the balance sheet date or within the entity's normal operating cycle if longer.

Restructuring Charges

Costs associated with reorganizing a company's structures and operations, often involving layoffs, facility closures, or other significant changes.

Condensed Income Statement

A simplified version of an income statement that shows the main components of net income and revenue in brief.