The ________ are tied together because both are a means for a bank to borrow.

Question

Quizplus · Accepted Answer

The federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight, on an uncollateralized basis. The repo rate is the interest rate at which a central bank lends money to commercial banks in the event of any shortfall of funds. Both of these rates are means for a bank to borrow, making option B the correct answer.

The ________ Are Tied Together Because Both Are a Means