The rate at which banks can borrow excess reserves from other banks is equal to

Question

Quizplus · Accepted Answer

The rate at which banks can borrow excess reserves from other banks is called the federal funds rate. This rate is determined by the supply and demand of excess reserves in the market and is influenced by the monetary policy decisions of the Federal Reserve. The discount rate (A) is the rate at which banks can borrow from the Fed itself. The interest rate paid on reserves held with the Fed (C) is the rate that the Fed pays banks to hold reserves with them. The treasury bill rate (D) is the interest rate at which the US government borrows money by issuing Treasury bills.

The Rate at Which Banks Can Borrow Excess Reserves from Other