00:01
Okay, so i see that you need help with this question and it says discount loans are no longer needed because the presence of the fdic eliminates the possibility of bank panics.
00:40
Why is this statement false? and so a says the fed uses an open market operations to inject liquidity.
00:59
B says the fed uses discounting to keep bank failures from spreading.
01:04
C, the fed can change the reserve requirements.
01:07
Or d, all of the above explaining why of the above explaining why the statement is incorrect.
01:17
Correct.
01:18
So analyzing the options given for this question, the fed uses open market operations to inject liquidity into the financial system.
01:27
This involves buying and selling government securities to control the supply of the money.
01:32
B, the fed uses discount providing discounting, providing discount loans to keep bank failures from spreading.
01:39
This is a direct way to provide financial institutions with emergency liquidity...