The interest rate on loans made by banks in the market in which they lend and borrow reserves from each other for very short periods of time is known as the:
a. discount rate.
b. legal reserve rate.
c. federal funds rate.
d. open market rate.
e. margin rate.
c
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The Ricardian Equivalence holds only if
A) the government is altruistic. B) there are no binding credit constraints. C) the government runs deficits. D) the government runs surpluses.
According to economists, one of the signs of an unhealthy economy is a(n)
a. rising labor productivity. b. increasing real GDP. c. declining real GDP. d. declining unemployment.
The figure below shows a shift in the production-possibility curve of a country from AB to AC. Here, S1 and C1 are the initial production and consumption points, respectively. S2 and C2 are the final production and consumption points, respectively. Which of the following is illustrated by this figure?
A. A small country experiencing a balanced growth B. A large country experiencing growth biased toward wheat production C. A large country experiencing a balanced growth D. A small country experiencing growth biased toward cloth production