Which of the following is true of the federal funds rate?
A) It is the interest rate that one bank charges another for overnight lending.
B) It is the interest rate that the Federal Reserve Bank charges commercial banks for borrowing money.
C) It is the interest rate you earn in your saving account.
D) It is the interest rate the bank charges business firms for borrowing money.
E) It is the interest rate that a domestic bank charges a foreign bank for borrowing money.
Correct Answer:
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