During 2007 as the Global Financial Crisis Started,the Fed Implemented

question 77

Multiple Choice

During 2007 as the global financial crisis started,the Fed implemented several new lending programs to increase liquidity,including ________.

• A) expansion of the discount window
• B) setting up the Term Auction Facility, making loans through competitive auctions
• C) lending to investment banks
• D) only A and B above.
• E) A, B, and C, are all correct.

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Definitions:

Increasing Opportunity Costs

The concept that as you produce more of one good, the opportunity cost of producing that next unit increases.

Scale Reduction

The process of downsizing the scope or size of operations, often in response to operational inefficiencies or declining profits.

Long-Run Average Total Cost

The average cost per unit of output incurred when all factors of production, including capital, are variable, considered over a sufficient period for all adjustments to be made.

Decreasing Returns to Scale

Decreasing returns to scale occur when increasing the inputs used in production results in a less than proportional increase in output.