If the Central Bank Can Act as a Lender of Last

question 41

Multiple Choice

If the central bank can act as a lender of last resort during a banking panic,banks can

• A)call in their loans to their customers and eventually restore the public's faith in the banking system.
• B)satisfy customer withdrawal needs and eventually restore the public's faith in the banking system.
• C)borrow more and more money from the central bank,and this will lower its reserves and decrease the public's faith in the banking system.
• D)encourage the public to borrow directly from the central bank,and this will worsen the banking panic.

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Definitions:

Naphthalene Acetic Acid

A synthetic compound resembling naturally occurring auxins, used to stimulate plant growth and rooting.

Auxin

A class of plant hormones that play a crucial role in coordinating various growth and behavioral processes in the plant's life cycle.

Asexual Propagation

A method of reproducing new plants from the existing plant's parts rather than from seeds, involving processes such as cutting, grafting, or layering.

α-Amylase

An enzyme that breaks down starches into sugars and is found in saliva and pancreatic fluid, aiding in the digestive process.