One reason the Federal Reserve lowered the discount rate during the Great Recession was to:Multiple choice question.buy up all the defaulted mortgages from banks.allow banks to borrow at lower rates.stop banks from making risky loans.help consumers who had defaulted on their mortgages.

Reducing the discount rate can influence the economy by:A.preventing investors from selling their treasury securities.B.giving banks an incentive to hold on to large reserves.C.encouraging businesses to borrow money from banks.D.greatly increasing the inflation rate across the economy.

The Federal Reserve increases the discount rate in order to:A.make more treasury securities available for sale.B.encourage banks to increase their prime rates.C.make banks more likely to lend money to customers.D.increase the overall money supply in the economy.

Why does changing the discount rate up or down have little impact on a bank's behavior?Select the two correct answers below. Select all that apply:Because banks are expected to first borrow from other available sources, like other banks.Because the Federal Reserve charges a higher discount rate than the rate of federal funds.Because of regulations which limit the amount of funds available at the discount windows.Because of congressional limits on the ability of the Federal Reserve to provide banks with loans.

If the economy is in a recession, the central bank could do all of the following EXCEPTa.Lower taxesb.Lower the Discount ratec.Lower the Funds rated.Buy securitiesClear my choice

What will happen in the money market if the Federal Reserve decreases the discount rate?Multiple choice question.Banks borrow more from the Fed and make more loans, causing the money supply to increase.Banks borrow less from the Fed and make fewer loans, causing the money supply to decrease.Banks borrow more from the Fed and make more loans, causing the money supply to decrease.Banks borrow less from the Fed and make fewer loans, causing the money supply to increase.