Question

The __________ is the rate financial institutions charge each other for overnight loans used as reserves,...

The __________ is the rate financial institutions charge each other for overnight loans used as reserves, while the __________ is the rate that the Fed charges depository institutions to borrow reserves from a regional Federal Reserve Bank.

federal funds rate / prime rate

discount rate / secondary rate

federal funds rate / discount rate

discount rate / prime rate

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Answer : federal funds rate / discount rate .

The federal funds rate is the interest rate banks charge each other for overnight loans of reserve balances . This is also used as a monetary policy tool . The discount rate is defined as the interest rate charged to commercial banks and other depository institutions on loans they take from their regional Federal Reserve Bank's lending facility , also called Discount window .

Add a comment
Know the answer?
Add Answer to:
The __________ is the rate financial institutions charge each other for overnight loans used as reserves,...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 10. The discount rate and the federal funds rate The discount rate is the interest rate...

    10. The discount rate and the federal funds rate The discount rate is the interest rate on loans that the Federal Reserve makes to banks. Banks occasionally borrow from the Federal Reserve when they find themselves short on reserves. A lower discount rate banks' incentives to borrow reserves from the Federal Reserve, thereby the quantity of reserves in the banking system and causing the money supply to The federal funds rate is the interest rate that banks charge one another...

  • 10. The discount rate and the federal funds rate The discount rate is the interest rate...

    10. The discount rate and the federal funds rate The discount rate is the interest rate on loans that the Federal Reserve makes to banks. Banks occasionally borrow from the Federal Reserve when they find themselves short on reserves. A lower discount rate banks' incentives to borrow reserves from the Federal Reserve, thereby the quantity of reserves in the banking system and causing the money supply to The federal funds rate is the interest rate that banks charge one another...

  • 10. The discount rate and the federal funds rate The discount rate is the interest rate...

    10. The discount rate and the federal funds rate The discount rate is the interest rate on loans that the Federal Reserve makes to banks. Banks occasionally borrow from the Federal Reserve when they find themselves short on reserves. A lower discount rate banks' incentives to borrow reserves from the Federal Reserve, thereby the quantity of reserves in the banking system and causing the money supply to ipply to . The federal funds rate is the interest rate that banks...

  • 31. Banks pay the _____________ rate when they borrow reserves from other banks. Banks pay the...

    31. Banks pay the _____________ rate when they borrow reserves from other banks. Banks pay the ______________ rate when they borrow reserves from the Fed. discount; federal funds federal funds; prime federal funds; discount prime; discount

  • 9. The discount rate and the federal funds rate The discount rate is the interest rate...

    9. The discount rate and the federal funds rate The discount rate is the interest rate on loans that the Federal Reserve makes to banks. Banks occasionally borrow from the Federal Reserve when they find themselves short on reserves. A lower spread between the discount rate and the federal funds rate decreases banks' incentives to borrow reserves from the Federal Reserve, thereby the quantity of reserves in the banking system and causing the money supply to The federal funds rate...

  • QUESTION 22 The interest rate the Fed charges other banks for loans is the ____ rate...

    QUESTION 22 The interest rate the Fed charges other banks for loans is the ____ rate and the interest rate on over night loans from one bank to another is the _____ rate. federal funds, discount reverse repo; repo discount: federal funds All of the above QUESTION 23 _ is the difference between a firm's assets and its liabilities. Debt capital Equity capital Collateral An initial Public Offering

  • Question 9 of 21 > The Bank of Key West is not going to have enough...

    Question 9 of 21 > The Bank of Key West is not going to have enough reserves at the end of the business day to meet its reserve requirement of 10%. It currently has two options to borrow money overnight in order to meet the requirement. First, it could borrow money from the Federal Reserve at a rate of 0.75%. Second, it could borrow money from other banks at a rate of 0.35%. What is the federal funds rate, and...

  • When can a bank make loans? a. when it has the minimum amount of required reserves...

    When can a bank make loans? a. when it has the minimum amount of required reserves b. only when it is confident that it can meet all the cash needs of depositors c. only when it has deposited all cash at the Federal Reserve d. when it has reserves greater than the amount of required reserves e. There is not enough information to solve this problem. 37. In a fractional reserve banking system, banks a. are able to create money...

  • QUESTION 1 Commercial bank reserves held at a Federal Reserve Bank are a liability of the...

    QUESTION 1 Commercial bank reserves held at a Federal Reserve Bank are a liability of the commercial bank and an asset of the Federal Reserve. True False QUESTION 2 During normal economic times, the Federal Reserve has primarily influenced overall financial conditions by adjusting the federal funds rate. The Fed Funds rate is the rate the U.S. Government charges banks for short term credit. True False QUESTION 3 Everything else held constant, a decrease in holdings of excess reserves will...

  • The discount rate Group of answer choices a. is the interest rate on loans of reserves...

    The discount rate Group of answer choices a. is the interest rate on loans of reserves from one bank to another b. is the main target of policy used by the Fed c. is the main tool of policy used by the Fed d. is not often changed for monetary policy

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT