This is the rate that private banks charge each other for loans, and it is manipulated to alter the supply of money.This rate is a determinant of other rates that banks charge their most credit-worthy customers.Identify this rate.

Question

Quizplus · Accepted Answer

The Federal funds rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. This rate is a key tool used by the Federal Reserve to influence monetary policy, and it indirectly affects the supply of money in the economy. Other interest rates, including the prime rate which banks charge their most credit-worthy customers, are influenced by changes in the federal funds rate.

This Is the Rate That Private Banks Charge Each Other