By acting as a lender of last resort during a banking panic,a central bank allows commercial banks to
A) encourage the public to borrow directly from the central bank, taking pressure off the banking system.
B) satisfy customer withdrawal needs and eventually restore the public's faith in the banking system.
C) call in their loans to their customers and eventually restore the public's faith in the banking system.
D) make additional loans to increase the assets on their balance sheets.
Correct Answer:
Verified
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