The federal funds rate is typically ____ the primary credit lending rate.

Question

Quizplus · Accepted Answer

The federal funds rate is typically less than the primary credit lending rate. This is because the primary credit lending rate is the highest rate at which banks can borrow money from the Federal Reserve, while the federal funds rate is the rate at which banks loan money to each other overnight. The primary credit lending rate is set at a higher rate to deter banks from relying too heavily on the Federal Reserve for funding.

The Federal Funds Rate Is Typically ____ the Primary Credit