ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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inflation
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interest
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discount rate
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reserve requirement
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Detailed explanation-1: -The federal discount rate is the interest rate the Federal Reserve (Fed) charges banks to borrow funds from a Federal Reserve bank. The Fed discount rate is set by the Fed’s board of governors, and can be adjusted up or down as a tool of monetary policy.
Detailed explanation-2: -The federal funds rate describes the interest rate that banks charge other banks for lending them cash (typically excess monies on hand in their reserve balances) on an overnight basis.
Detailed explanation-3: -What Is a Discount Window? The discount window is a central bank lending facility meant to help commercial banks manage short-term liquidity needs. Banks that are unable to borrow from other banks in the fed funds market may borrow directly from the central bank’s discount window paying the federal discount rate.