The interest rate that the Fed charges banks to borrow funds from the Fed is the

Question

Quizplus · Accepted Answer

The interest rate that the Fed charges banks to borrow funds from the Fed is known as the discount rate. Therefore, the correct choice is A). The federal funds rate is the interest rate that banks charge each other for overnight loans of federal funds, while the money market rate refers to the interest rate on short-term government securities in the open market. The nominal interest rate is the interest rate before accounting for inflation.

The Interest Rate That the Fed Charges Banks to Borrow