One of the Primary Purposes of the Federal Reserve System

question 43

Multiple Choice

One of the primary purposes of the Federal Reserve System (the Fed) is to guard against

• A)national gasoline shortages by maintaining large stores of oil at the country's military bases.
• B)state governments defaulting on their debt obligations by limiting budget expenditures.
• C)the federal government defaulting on its debt obligations by limiting budget expenditures.
• D)bank failures during a sudden economic scare by making sure that banks do not overextend themselves.

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Definitions:

Bullwhip Effect

A phenomenon in supply chains where small fluctuations in demand at the retail level cause progressively larger fluctuations in demand at the wholesale, distributor, and manufacturer levels.

Order Size

The quantity of goods a company purchases or produces in a single order to meet its demand while minimizing costs.

Disaster Risk

The likelihood of loss of life, injury, or destruction and damage from a disaster in a given period.

Suppliers

Entities that provide goods or services to another entity, typically within a supply chain, to assist in the production of final products or services.