The Fed can directly protect a bank during a bank run by
Group of answer choices
increasing reserve requirements
lending reserves to the bank
doing any of the above
selling government bonds to the bank.
Correct Answer:
B
Explanation:
Bank run is a phenomenon that involves many customers come to the banks and withdraw funds. It causes banks to be devoid of reserves. In this scenario, Fed can help the bank by lending reserves to the banks so that deposit withdrawal demand is honored by the banks. It is the way, Fed can help and protect banks.
The Fed can directly protect a bank during a bank run by Group of answer choices...
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