Which of the Following Is an Action of Central Banks

question 69

Multiple Choice

Which of the following is an action of central banks and governments to lessen the severity of a banking crisis?

• A)establishing shadow banks
• B)guaranteeing bank deposits
• C)encouraging asset bubbles
• D)opening a liquidity trap

---

Definitions:

Efficiency

The degree to which an entity optimizes the use of its resources to achieve its objectives, minimizing waste and maximizing output.

Equality

Refers to the state or quality of being equal, especially in status, rights, or opportunities.

Redistributes Income

The process by which government policies, taxation, and public spending aim to adjust the allocation of income across a society.

Efficiency

describes the extent to which resources are allocated in a way that maximizes the output or outcome, often considering waste minimization and optimal allocation in economic contexts.