Last Word During the financial crisis of 20072008 Multiple C

(Last Word) During the financial crisis of 2007-2008, Multiple Choice many solvent firms were in danger of bankruptcy because their assets were iliquid. the Federal Reserve took over and reorganized a number of insolvent firms many large banks were insolvent and ultimately declered bankruptcy the Federal Reserve served as lender of last resort to solvent firms, but let insolvent firms go bankrupt

Solution

Option 4

The Fed served as the lender of last resort and used creative facilities like bailout options to lend to financial insitutions to help to recover from the crisis