The rate of interest that the Federal Reserve charges on loans to member banks is the:
a. open market rate.
b. federal funds rate.
c. discount rate.
d. prime interest rate.
e. reserve lending rate.
c
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The least costly combination of inputs is influenced by the relative prices of inputs.
Answer the following statement true (T) or false (F)
The loanable funds market brings together savers and borrowers to determine the
a. marginal rate of return on investment b. rate of time preference c. market rate of interest d. marginal resource cost of investment e. marginal revenue product of investment
Which of the following is the primary source of high earnings in a market economy?
What will be an ideal response?
Because the U.S. economy failed to snap back from a mild recession in 2001, the Fed pushed the federal funds rate down to 1 percent. What effect did this have on the economy?
What will be an ideal response?