Which of the following is an interest rate that is set directly by the Fed?
A) the prime lending rate
B) the required reserve rate
C) the discount rate
D) the federal funds rate

Question

Quizplus · Accepted Answer

The discount rate is the interest rate at which banks can borrow directly from the Federal Reserve. The Fed sets this rate directly. The prime lending rate and federal funds rate are influenced by the Fed's actions but are set by individual banks. The required reserve rate refers to the amount of money banks are required to hold in reserve and is set by the Fed but is not an interest rate.

Which of the Following Is an Interest Rate That Is