When banks borrow directly from the Fed,the interest rate on those loans is the:
A) prime rate.
B) discount rate.
C) Federal Funds rate.
D) required reserve rate.

Question

Quizplus · Accepted Answer

When banks borrow directly from the Fed, the interest rate on those loans is the discount rate. The Federal Funds rate is the interest rate at which banks lend to each other overnight, and the prime rate is the interest rate that banks offer to their most creditworthy customers. The required reserve rate is the percentage of deposits that banks are required to hold in reserve.

When Banks Borrow Directly from the Fed,the Interest Rate on Those