Of the following, the most sensitive interest rate in the money market is the:
A)bankers' acceptance rate Not in chapter
B)prime rate
C)Federal Reserve's discount rate
D)federal funds rate

Question

Quizplus · Accepted Answer

The federal funds rate is the interest rate at which banks lend or borrow funds from each other on an overnight basis. It is the most sensitive interest rate in the money market because it is closely monitored and influenced by the Federal Reserve. Changes in the federal funds rate can cause a ripple effect throughout the economy, impacting borrowing and spending by consumers and businesses.

Of the Following, the Most Sensitive Interest Rate in the Money