The fed can supply funds to the markets in the case of a financial panic because they are the lender of last resort.
What is markets?
The term “market” refers to the exchange of commodities and services. A market mainly involves the buyer and seller. Types of markets, such as perfect competition, monopoly markets, monopolistic competition, and oligopoly markets.
Financial panic of the condition as supply fund markets to fed as last option was of lender of last resort. The term lender of last resort define as loan of those banks are faced by the financial difficulties.
As a result, the condition of the financial panic are fund supply in the market there is last option is lender of last resort.
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