The specific interest rate that banks pay to the Federal Reserve Bank for short-term loans is called a(n):

Question

Quizplus · Accepted Answer

The discount rate is the specific interest rate that banks pay to the Federal Reserve when they borrow money on a short-term basis. It is also one of the tools used by the Fed to control the money supply and influence the economy. The other options are incorrect as the federal funds rate is the interest rate that banks charge each other for overnight loans, the emergency loan rate is not a commonly used term in finance, and the federal reserve rate is not a specific interest rate used by the Fed.

The Specific Interest Rate That Banks Pay to the Federal