The interest rate at which the Bank of Canada make short term loans to member banks.is called the ________.

Question

Quizplus · Accepted Answer

The discount rate is the interest rate at which banks can borrow money from the central bank, in this case the Bank of Canada, when they need short-term funding. A is incorrect because the federal funds rate is the interest rate at which banks lend or borrow money from each other overnight in the United States, not in Canada. B is incorrect as the margin rate is the rate charged by stockbrokers to investors for borrowing money to buy securities. D is incorrect as the reserve requirement is the percentage of deposits that banks must hold in reserve and not related to interest rates.

The Interest Rate at Which the Bank of Canada Make