M&B Bank
Ken is a senior manager at M&B Bank. Initially, he started as a front counter worker and slowly progressed up the career ladder. In his role as a senior manager, Ken is keeping a keen eye on the industry, the Federal Reserve System, and the bank's competitors. Ken's previous boss did not do that well, and as a result the bank had suffered.
Several employees have pointed out that many businesses are not aware of the procedures for or a systematic way to evaluate the creditworthiness of their customers, collect past-due payments from customers, and protect their businesses from such losses. Based on feedback from several employees, M&B has decided to offer credit-counseling workshops for individuals and small businesses.
-Refer to M&B Bank. Ken was concerned about the method used by the Federal Reserve System to control the money supply. He believed this would result in the bank having less money to lend to customers. Which of the following methods refers to Ken's concern?

Question

Quizplus · Accepted Answer

The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility. An increase in the discount rate makes it more expensive for banks to borrow money, which in turn makes it more expensive for businesses and consumers to borrow money from banks. This can lead to a decrease in the money supply, as businesses and consumers are less likely to borrow money when interest rates are high.

M&B Bank Ken Is a Senior Manager at M&B Bank. Initially, He