Recall Application 4, "Coping with the Financial Chaos Caused by the Mortgage Crisis," to answer the following
questions:
-According to Application 4, by buying commercial paper or extending short term loans to corporations, the Fed is applying which of its primary functions to private corporations?

Question

Quizplus · Accepted Answer

The Fed's role as lender of last resort involves providing short-term loans to private corporations or banks during times of financial distress. Buying commercial paper or extending short term loans to corporations is an example of this function in action.