The ________ is the interest rate commercial banks pay to the Fed; the ________ is the interest rate commercial banks charge each other for short-term loans.
A. discount rate; federal funds rate
B. federal funds rate; discount rate
C. nominal interest rate; prime rate of interest
D. nominal interest rate; real interest rate
Answer: A
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If there are no changes in inflation expectations, a fall in the federal funds rate:
A) increases both the long-run nominal interest rate and the long-run expected interest rate. B) decreases the long-run nominal interest rate and increases the long-run expected interest rate. C) decreases both the long-run nominal interest rate and the long-run expected interest rate. D) increases the long-run nominal interest rate and decreases the long-run expected interest rate.
Wages that are above the wage that workers would accept, where the premium is paid to increase worker productivity, are referred to as:
A) wage floors. B) wage ceilings. C) efficiency wages. D) productivity wages.
An efficiency wage is designed to ________ work effort and to ________ labor turnover
A) increase; raise B) decrease; raise C) not change; decrease D) increase; lower E) decrease; lower
A clause in a mortgage loan contract requiring the borrower to purchase homeowner's insurance is an example of a
A) proscriptive covenant. B) prescriptive covenant. C) restrictive covenant. D) constraint-imposed covenant.