When the central bank acts as a lender of last resort, it:
A)requires the borrower to put up collateral.
B)is able to confiscate some of the borrower's assets.
C)requires voting rights of the borrower's board of directors.
D)nationalizes the borrower.

Question

Quizplus · Accepted Answer

When the central bank acts as a lender of last resort, it typically requires the borrower to put up collateral to secure the loan. This collateral can include government securities or other assets that the central bank deems acceptable. This helps to protect the central bank from losses in case the borrower defaults on the loan. Confiscation of assets, requiring voting rights, or nationalization of the borrower would not be typical actions of a central bank acting as a lender of last resort.

When the Central Bank Acts as a Lender of Last