In an Effort to Stabilize the Banking Sector and Keep

question 286

Multiple Choice

In an effort to stabilize the banking sector and keep banks lending, from October 2008 to September 2009, the Fed

• A)raised reserve requirements.
• B)raised the amount of interest paid on reserves held at Fed banks.
• C)declared a series of bank holidays to give banks a chance to recover from excessive withdrawals from customer accounts.
• D)lowered the federal funds target rate.

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Definitions:

Marginal Cost

The expenditure required to produce one more unit of a product or service.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a particular price over a given period of time.

Marginal Revenue

The extra revenue gained by the sale of an additional unit of a product or service.

Total Revenue

The total amount of income generated by the sale of goods or services by a company.