Why Did the Fed Expand Discount Lending in the Aftermath

question 55

Multiple Choice

Why did the Fed expand discount lending in the aftermath of the terrorist attacks in the fall of 2001?

• A)It feared that inflation was going to increase.
• B)To ensure the smooth operation of banks in the affected areas.
• C)It feared the effects on the U.S. economy of rising oil prices.
• D)It was attempting to increase the chances that President Bush would be reelected.

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Definitions:

Proactive Interference

The tendency of previously learned material to hinder subsequent learning.

Memory Construction

The process through which the brain encodes, stores, and retrieves information, influenced by perception, imagination, and other cognitive processes.

Sensory Memory

The briefest span of memory, capable of holding sensations of sensory data after the initial stimuli are no longer present.

Repression

A defense mechanism where unpleasant thoughts, memories, or desires are pushed out of the conscious mind into the unconscious.