The ________ rate is the interest rate at which commercial banks lend reserves to each other,usually overnight.

Question

Quizplus · Accepted Answer

The federal funds rate is the interest rate at which commercial banks lend reserves to each other, usually overnight. This rate is set by the Federal Reserve and is a key tool for implementing monetary policy. The discount rate (A) is the interest rate that the Fed charges banks for borrowing from its discount window. The open-market (B) is the rate at which the Fed buys or sells government securities in the open market to influence the money supply. The selective rate (D) is not a commonly used term in economics.

The ________ Rate Is the Interest Rate at Which Commercial