ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the member bank must pay the district bank for a loan
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you and I must pay our bank for a loan
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the district bank pays the national bank for a loan
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the FED pays FOMC for services
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Detailed explanation-1: -The interest rate is the cost of debt for the borrower and the rate of return for the lender. The money to be repaid is usually more than the borrowed amount since lenders require compensation for the loss of use of the money during the loan period.
Detailed explanation-2: -This is due to interest and fees, which is what a lender charges you for the use of its money. It is also referred to as a finance charge. A finance charge is the dollar amount that the loan will cost you. Lenders generally charge what is known as simple interest.
Detailed explanation-3: -An APR is your interest rate for an entire year, rather than just a monthly fee or rate, on your credit cards or loans, plus any costs or fees associated with the loan. It’s the total cost of having the credit card or loan, stated as a percentage.
Detailed explanation-4: -Interest is charged as a percentage of the money you’ve borrowed, but the rate could vary based on the types of transaction you make.
Detailed explanation-5: -The federal funds rate is the interest rate banks charge each other to borrow funds, whereas the discount or bank rate is the rate the Federal Reserve charges commercial banks to borrow funds. A lowered discount rate correlates to lower rates paid on savings accounts.