Describe the difference between a primary credit discount rate and the secondary credit discount rate, including who can borrow at which rate and how such lending is managed by the Fed
What will be an ideal response?
Banks in good condition can take out a primary credit discount loan, without additional supervision from the Fed. Banks that are not in good condition may be allowed to take out a secondary credit discount loan, which carries a higher interest rate and closer supervision by the Fed.
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Juanita, a lawyer, can type faster than Jill, her secretary. Jill, on the other hand, does not have the ability or skills to practice law. Applying the principles of international trade to this situation, an economic consultant advises Juanita to:
a. fire Jill, practice law during the day, and do her own typing at night. b. practice law and leave all the typing to the secretary. c. divide her time equally between typing and practicing law. d. quit practicing law and take a job as a secretary. e. have Jill attend law school.
Which of the following is an example of a progressive tax?
a. The federal personal income tax b. The federal tax on gasoline c. All of the answers are correct. d. The excise tax on cigarettes
When the growth rate of the economy slows we would expect:
A. the risk spread to increase more between Aaa and Baa securities than U.S. Treasuries and Aaa securities. B. the risk spread to increase more between U.S. Treasury Securities and Aaa securities than between Aaa and Baa securities. C. the risk to increase for U.S. Treasury securities. D. investors to purchase more junk bonds in search of a higher yield.
The relationship between prices and the corresponding quantities supplied is shown in a:
a. supply schedule. b. demand schedule. c. price-earnings ratio. d. production possibilities curve. e. total output schedule.