The Fed Can Directly Protect a Bank During a Bank

question 62

Multiple Choice

The Fed can directly protect a bank during a bank run by

• A)increasing reserve requirements.
• B)selling government bonds to the bank.
• C)lending reserves to the bank.
• D)doing any of the above.

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Definitions:

Cognitive Dissonance

A psychological state where a person experiences discomfort or distress from holding two or more conflicting beliefs, values, or attitudes simultaneously.

Role Playing

A teaching or training method that involves acting out roles in specific scenarios to practice behaviors or explore complex situations.

Foot-In-The-Door Phenomenon

A compliance strategy where persuading someone to agree to a small request increases the likelihood they will agree to a larger request later.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors in judging others' behavior.