The ________ rate is the interest rate at which the Fed lends ________ to depository institutions.
A) discount rate; reserves
B) discount rate; gold
C) federal funds rate; deposits
D) federal funds rate; reserves

Question

Quizplus · Accepted Answer

The discount rate is the interest rate set by the Federal Reserve for lending to depository institutions, typically for very short-term loans. This rate is distinct from the federal funds rate, which is the rate at which depository institutions lend balances at the Federal Reserve to each other overnight.

The ________ Rate Is the Interest Rate at Which the Fed