In 2007,the British government bailed out the Northern Rock bank following the bank run.In doing this,the British government was,in effect,acting as a

Question

Quizplus · Accepted Answer

The British government bailed out the Northern Rock bank by providing funds to prevent its collapse during the bank run. This action was taken by the government as a lender of last resort to maintain financial stability in the country. Therefore, option D is the correct answer. Option A is incorrect as shadow banks are non-banking financial institutions that provide similar services as traditional banks but operate outside the regulatory framework. Option B is incorrect as open market operations are conducted by central banks to control the money supply in the market. Option C is incorrect as private equity firms invest in private companies to get a significant stake in them, but they are not involved in financial rescues of banks.

In 2007,the British Government Bailed Out the Northern Rock Bank