The discount window enables the Fed to
A)better regulate the banking system.
B)take action to change interest rates.
C)be a lender of last resort.
D)ensure the banking system's profitability.
E)control the money supply.

Question

Quizplus · Accepted Answer

The discount window allows the Fed to be a lender of last resort, providing short-term loans to banks that may be facing liquidity problems. It is a tool for maintaining financial stability in the banking system, rather than directly regulating interest rates or ensuring profitability. While it can impact the money supply, that is not its primary purpose.

The Discount Window Enables the Fed to