The interest rate that banks charge one another for overnight lending of reserves is the
A)federal funds rate
B)interbank credit card rate
C)subprime mortgage rate
D)prime rate
E)local funds rate

Question

Quizplus · Accepted Answer

The interest rate that banks charge one another for overnight lending of reserves is referred to as the federal funds rate. This rate is set by the Federal Reserve and serves as a benchmark for other interest rates in the economy.

The Interest Rate That Banks Charge One Another for Overnight