Question

Lender of last resort is a name given to the _____ _____ _____ because it was created to assist other banks within the United States.

Options:
a) World Bank
b) Federal Reserve
c) International Monetary Fund
d) Bank of England

Answer 1

The 'lender of last resort' in the United States is the Federal Reserve, which helps to maintain stability in the financial system by providing support to banks in times of crisis.

Step-by-step explanation:

The term 'lender of last resort' refers to the function of a central bank that provides funds to financial institutions when no one else will. This role is crucial during times of financial panic or crisis, to prevent the failure of banks that are otherwise solvent and to protect the financial system from widespread collapse. In the context of the United States, the Federal Reserve serves as the lender of last resort.

It stands ready to provide short-term loans to banks and financial institutions to ensure liquidity and stability within the banking system.