Question

The fed offers three types of discount window loans. ______________ credit is offered to small institutions with demonstrable patterns of financing needs, _____________ credit is offered for short-term temporary funds outflows, and _____________ credit may be offered at a higher rate to troubled institutions with more severe liquidity problems.

Answer 1

Answer;

D. Seasonal; primary; secondary

Explanation;

The fed offers three types of discount window loans. Seasonal credit is offered to small institutions with demonstrable patterns of financing needs, primary credit is offered for short-term temporary funds outflows, and secondary credit may be offered at a higher rate to troubled institutions with more severe liquidity problems.

The Federal Reserve discount window is how the U.S. central bank lends money to its member banks. It's also called the Fed's use of credit.

The borrowing banks must post collateral to the Fed in return for the loan. Such collateral can include U.S. Treasury bills, bonds, and notes, state and local government securities, AAA mortgages, consumer loans, and commercial loans.