The interest rate that banks charge other banks for short-term loans is the:

Question

Quizplus · Accepted Answer

The interest rate that banks charge other banks for short-term loans is known as the federal funds rate. This is because the loans are made through the Federal Reserve's Federal Funds Market. The other options are not correct as they refer to different interest rates: 
A) Discount rate: The interest rate at which the Federal Reserve lends money to commercial banks.
B) Prime rate: The interest rate that commercial banks charge their most creditworthy customers.
C) Treasury rate: The interest rate at which the US government sells its debt securities (bonds, bills, and notes).
E) Interbank rate: The interest rate at which banks borrow and lend to each other in the international market.

The Interest Rate That Banks Charge Other Banks for Short-Term