The federal funds rate is the rate banks charge one another for overnight loans.
Answer the following statement true (T) or false (F)
True
The federal funds rate is the rate banks pay when they borrow from one another.
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Describe the effect that a surplus of tobacco will have on a cigarette producer's pricing and production decisions.
What will be an ideal response?
Shocks to long-run aggregate supply can be a source of business fluctuations ________
A) only in real business cycle models B) only in new Keynesian models C) in both real business cycle and new Keynesian models D) only if the money supply rises
If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the equilibrium price of cigarettes will fall. This fall in the equilibrium price can be attributed to a(n):
a. upward movement along the supply curve for cigarettes. b. rightward shift of the supply curve for cigarettes. c. upward movement along the demand curve for cigarettes. d. leftward shift of the supply curve for cigarettes.
When economies of scale are present,
a. costs per unit decline as output expands. b. the government feels responsible for breaking up the firm. c. firms always make handsome profits. d. costs fall as the size of the product is increased.