Perhaps the single most important responsibility of the Fed is to set the "discount rate," which is the _______________.

Question

Perhaps the single most important responsibility of the Fed is to set the "discount rate," which is​ the _______________.

Quizplus · Accepted Answer

The discount rate is the interest rate charged to member banks when they borrow short-term funds from the Federal Reserve Bank. This rate is set by the Federal Reserve and is one of the primary tools used to implement monetary policy. By changing the discount rate, the Fed can influence the borrowing behavior of member banks and, through them, the overall level of lending and economic activity in the country.

Perhaps the Single Most Important Responsibility of the Fed Is