During the 2007-2009 Financial Crisis,what Actions Did the Fed Take

question 51

Multiple Choice

During the 2007-2009 financial crisis,what actions did the Fed take to limit the scope of the crisis?

• A) The Fed lowered the spread on the discount rate to 50 basis points, and then to 25.
• B) The Fed set up the Term Auction Facility to provide further liquidity to banks.
• C) The Fed purchased assets of Bear Stearns to facilitate the purchase of Bear Stearns by J.P. Morgan.
• D) all of the above.

---

Definitions:

Discount Period

The discount period is the timeframe during which a seller offers a buyer a reduction in the amount owed if payment is made within a specified time.

Discounted Note

A debt instrument sold for less than its face value that will pay the face value at maturity, effectively representing a loan made by the buyer to the issuer.

Discount Period

The time frame during which a payment can be made at a reduced price or with a deduction from the usual cost.

Interest Income

The income earned from lending funds or depositing money in interest-bearing accounts, like savings accounts or bonds.