The discount rate is
A) the interest rate paid when a bank borrows reserves from another bank.
B) the interest rate paid when a commercial bank borrows reserves from the Fed.
C) the reduction in the interest rate given to the bank's best customers.
D) another name for the long-term interest rate.
E) the interest rate the Fed pays banks for the reserves the banks keep at the Fed.
B
You might also like to view...
The new growth theory of economic growth examines the interaction of
A) regulations and capital expansion. B) technology, research, and innovation. C) resources and labor productivity. D) labor and population.
When Scuba, Inc., lowered the price of a tank of compressed air by 20 percent, it sold 10 percent more tankfuls. The price elasticity for compressed air is
A. 2 B. 1/2. C. 1 D. 20
Which of the following might the Fed rely on as an intermediate target?
A) The monetary base B) The discount rate C) M2 D) The exchange rate of the dollar
In a model with money neutrality, how much should the money supply be increased to obtain a 1% increase in nominal output?
A) -1% B) between 0 and 1% C) 1% D) It cannot be done.