Discuss why the discount rate may be considered a penalty rate of interest charged to banks.
What will be an ideal response?
The discount rate could be considered a penalty rate because it is set above the IOER rate. As a result, any bank borrowing from the Fed will pay a higher interest rate than they would pay if they used the federal funds market. A bank who then borrows from the Fed is paying a penalty for either not using the market first (though this is unlikely) or more likely, not being financially stable enough to warrant a loan from another bank.
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Currently about what percentage of the civilian labor force is unionized in the United States?
A) 6 percent B) 12 percent C) 30 percent D) 70 percent
Which of the following is a consensus view among economists with regard to fiscal policy?
a. Changes in fiscal policy exert a strong influence on real output, just as the basic Keynesian model suggests. b. Expansionary fiscal policy will not help promote recovery from a recession. c. Restrictive fiscal policy is a potent anti-inflationary weapon. d. Since changes in discretionary policy are difficult to time correctly, fiscal policy should not be altered in response to each minor disturbance.
An increase in the federal funds rate is a signal that the Fed wants a tighter monetary policy.
Answer the following statement true (T) or false (F)
The phrase "bundle of legal rights" is properly included in
A) the definition of real property. B) a legal description. C) real estate transactions. D) leases for less than one year.