Economics · May / June 2016 · Paper 12 · Question 9
When will a central bank act as lender of last resort to a commercial bank?
- Awhen a commercial bank faces a liquidity crisis
- Bwhen a commercial bank fails to make a profit
- Cwhen a commercial bank needs to raise share capital
- Dwhen a commercial bank reduces its lending rates
As printed in the paper
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Correct answer: A. when a commercial bank faces a liquidity crisis
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