Capital MarketsQuestion 332 of 398
The interest rate the Federal Reserve charges member banks for short-term loans directly from the Fed is called the:
a.Federal funds rate
b.Discount rate
c.Prime rate
d.Coupon rate
Explanation
The discount rate is the rate the Fed charges banks that borrow directly from it through the discount window. It differs from the federal funds rate, which is the rate banks charge each other for overnight loans of reserves.
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- Which body is responsible for setting U.S. monetary policy, including influencing interest rates and the money supply?
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