During one week of October during the financial crisis of 2008,banks:
A)borrowed $117 billion from the discount window,a historically large figure.
B)borrowed $117 billion from the discount window,a historically small amount.
C)kept over $117 billion in excess reserves,and the discount rate dropped.
D)kept over $117 billion in excess reserves,and the discount rate increased.

Question

Quizplus · Accepted Answer

During the financial crisis of 2008, banks faced liquidity problems and turned to the Federal Reserve's discount window for funding. In one week of October 2008, banks borrowed a historically large figure of $117 billion from the discount window, which indicates that they needed significant support to meet their short-term funding needs. Therefore, option A is the correct answer.

During One Week of October During the Financial Crisis of 2008,banks