Asked by Ruthny Bonnet on May 12, 2024
Verified
Which statement is true?
A) The Fed failed to perform its lender of last resort job after the emergency created by the terrorist attacks on 9/11.
B) Thanks to the Check Clearing for the 21st Century Act,the use of checks as a medium of exchange should disappear within a few years.
C) The Chinese government and central bank has a significant influence over long-term interest rates in the U.S.
D) The Fed changes the federal funds rate in exactly the same manner in which it changes the discount rate.
Check Clearing
The process by which banks settle transactions by transferring money from the check writer's account to the recipient's account.
Federal Funds Rate
The interest rate at which banks lend reserve balances to other banks overnight, on an uncollateralized basis.
Discount Rate
The interest rate charged by central banks for short-term loans to commercial banks.
- Gain insight into the apparatus and objectives utilized by the Federal Reserve System.
- Discuss the significance of the lender of last resort function of the Federal Reserve.
Verified Answer
AS
Anthony SanchezMay 13, 2024
Final Answer :
C
Explanation :
The Chinese government and central bank hold a significant amount of U.S. Treasury securities, which gives them influence over U.S. long-term interest rates through their decisions on buying or selling these securities.
Learning Objectives
- Gain insight into the apparatus and objectives utilized by the Federal Reserve System.
- Discuss the significance of the lender of last resort function of the Federal Reserve.