The discount rate is
A) the interest rate banks charge each other for overnight loans.
B) the interest rate banks charge their best customers.
C) the interest rate the Fed charges to banks for loans from the Fed.
D) the interest rate the U.S. Treasury pays on Treasury Bills.
Answer: C
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The Fed uses operating targets as well as intermediate targets because
A) the Federal Reserve Act of 1913 requires it to do so. B) the Fed controls intermediate targets only indirectly. C) the public is much more unfamiliar with the variables used as operating targets, so for policy to be effective intermediate targets must also be announced. D) if one set of targets proves ineffective in attaining policy goals, the other set is available.
The economic behavior of individual decision makers and the determination of price and output in specific markets are both studied in
a. microeconomics b. macroeconomics c. positive economics d. normative economics e. disequilibrium economics
The long-run aggregate supply curve
a. is vertical b. is upward sloping c. is downward sloping d. is horizontal e. can have a variety of shapes depending on fiscal policy
The three components of consumption are durable goods, nondurable goods, and housing construction
Indicate whether the statement is true or false