Define the discount window and federal reserves policy tool

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The Federal Reserve Discount Window was fundamental to the founding of the Fed in 1913. And while the basic structure has stayed the same, in at least one way its importance has been diminished and in at least one way its importance remains significant. Define the Discount Window and the Federal Reserve’s policy tool within this structure. Explain one way its importance has diminished and another which has remained significant. Identify the banking “nightmare” that the Discount Window seeks to address. With two balance sheets, one for a bank and one for the Federal Reserve, show the effect of the bank using the Discount Window (for the sake of clarity, please use $1000 as your number).

Reference no: EM131194389

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