The federal funds rate reflects the cost for banks to borrow from other banks.
Answer the following statement true (T) or false (F)
True
The federal funds rate is an overnight, interbank loan rate paid to cover reserve requirements.
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The liquidity trap is the
A) vertical portion of the demand curve for money. B) horizontal portion of the demand curve for money. C) vertical portion of the supply curve of money. D) horizontal portion of the supply curve of money. E) vertical portion of the demand curve for investment.
Assuming r is the interest rate, to compute the present value of a dollar to be received a year from today, you
A) multiply the dollar by r. B) divide the dollar by (1 - r). C) multiply the dollar by (1 + r). D) divide the dollar by (1 + r).
Vault cash is part of a commercial bank's
A) demand deposits. B) capital. C) reserves. D) liabilities.
Labor saving nonneutral technical progress allows a firm to
A) produce more output with the same inputs. B) use less labor and the same amount of other inputs to produce the same level of output. C) use more labor to produce the same level of output. D) use less labor and more of other inputs to produce the same level of output.