By acting as a lender of last resort during a banking panic, a central bank allows commercial banks to

A) encourage the public to borrow directly from the central bank, taking pressure of the banking system.
B) satisfy customer withdrawal needs and eventually restore the public's faith in the banking system.
C) call in their loans to their customers and eventually restore the public's faith in the banking system.
D) make additional loans to increase the assets on their balance sheets.

B

Economics

You might also like to view...

The difference between a firm's revenue and its operating expenses is the firm's operating income

Indicate whether the statement is true or false

Economics

The marginal propensity to consume is greater than zero but less than one

a. True b. False

Economics