5. Which of the following were not actions taken by the Federal Reserve in order

Question

5. Which of the following were not actions taken by the Federal Reserve in order to stimulate the economy during the recession of 2007-2009? a. decreasing the discount rate b. suspending trading on the major stock exchanges c. massive lending to banks d. open market purchases of assets other than Treasury bills 6. The concept of "lender of last resort" is that when a. lending decreases, the Fed will be the last to resort to higher interest rates b. borrowing increases, the Fed will be the last to increase lending c. commercial banks are hesitant to lend, the Fed will step in and increase reserves. d. a borrower has tried everyone else, the Fed will lend directly to them.

Explanation / Answer

5> suspending trading on the major stock exchanges

Reason

Fed never suspended trading on exchanges even after the recession.

6> d>

Reason

A lender of last resort is an institution, usually a country's central bank, that offers loans to banks or other eligible institutions that are experiencing financial difficulty or are considered highly risky or near collapse.

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