The federal funds rate is the interest rate:
a. U.S. financial institutions pay to their best (i.e., largest) depositors.
b. U.S. financial institutions charge their best customers.
c. On U.S. interbank loans.
d. The Federal Reserve changes banks that borrow from it.
e. The World Bank charges to central banks.
.C
You might also like to view...
Which of the following types of economic regulation is most likely to encourage a natural monopoly to NOT inflate its costs?
A) average cost pricing rule B) rate of return regulation C) price cap regulation D) None of the above encourages cost cutting.
In the last 20 years, which of the following countries has experienced positive economic growth?
A) Russia. B) Zimbabwe. C) Haiti. D) All of the above have seen their economies decline during this period.
Consider an initial IS-LM equilibrium with normally-sloped curves. An increase in government spending takes us to a new equilibrium with ________ income and ________ interest rate
A) higher, a higher B) higher, a lower C) an unchanged, a higher D) an unchanged, a lower E) lower, an unchanged
Which of the following statements is correct? a. To control the money supply, the Fed relies primarily on the reserve requirement
b. The discount rate is the rate of interest banks charge to their best customers. c. The Fed changes the reserve requirement frequently. d. Because the Fed has no way to earn income, it is dependent upon Congress for appropriations. e. Banks can turn a borrower's IOU into money.