Did the Bank of England Intervene and Perform Its Lender

question 101

Multiple Choice

Did the Bank of England intervene and perform its Lender of Last Resort responsibility to end the panic in August 2007?

• A) Yes
• B) No
• C) Yes, only after a bank run and under pressure from the British financial industry
• D) No, since such support would present a moral hazard problem
• E) No, despite intense pressure from the chancellor of the exchequer.

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Definitions:

Transfer Price

The price one subunit of a company charges for a product or service supplied to another subunit of the same organization.

Connector Division

A specialized department within a company focused on the production or distribution of connector components for various applications.

Idle Capacity

The portion of a company's resources or production capability that is not being used to generate revenue or output.

Transfer Price

The price at which goods and services are sold between units of the same company.