Question

how does the federal reserves lender of last resort role prevent a banking crisis from worsening?
(1 point)

it forces failing banks to close down immediately.
it offers personal loans directly to all citizens.
it sets the price of all goods and services.
it gives emergency loans to prevent bank failures.

Explanation:

The "lender of last resort" role of the Federal Reserve means it provides emergency loans to banks facing liquidity issues. Option A is wrong as it doesn't force banks to close. Option B is wrong as it doesn't offer personal loans to citizens. Option C is wrong as the Fed doesn't set prices of goods/services. Only option D matches the role of providing emergency loans to prevent bank failures.

Answer:

D. It gives emergency loans to prevent bank failures.