The discount rate is the interest rate that
A) the Federal Reserve charges when it loans reserves to depository institutions.
B) is the lowest rate that banks will charge when lending to their best customers.
C) the Federal Reserve charges when it loans to the U.S. Government.
D) banks charge when they lend to each other.

Question

Quizplus · Accepted Answer

The discount rate is the interest rate set by the Federal Reserve for lending to financial institutions, not for loans to the U.S. Government, between banks, or the rate banks charge their best customers.

The Discount Rate Is the Interest Rate That