The discount rate is the interest rate
A) that banks charge their best customers.
B) that the Fed charges on its last resort loans.
C) that banks charge each other.
D) that bank insurers pay on insured deposits.

Question

Quizplus · Accepted Answer

The discount rate is the interest rate that the Federal Reserve (the Fed) charges banks for short-term loans, often considered as a lender of last resort to financial institutions in need of funds.

The Discount Rate Is the Interest Rate