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Arturiano [62]
3 years ago
7

When a commercial bank borrows additional reserves from another bank, it pays which interest rate?

Business
2 answers:
oksano4ka [1.4K]3 years ago
8 0

Answer:

Federal funds rate

Explanation:

Federal funds rate can be described as a target interest rate which is set by the Federal Open Market Committee (FOMC) and it is the interest rate at which excess reserves of commercial banks are lent to and borrowed from each other overnight.

The law requires that commercial banks must maintain certain percentage of their deposits in their account with Federal Reserve bank as a reserve. When there is an excess of money above the required level in the reserve of some banks, the excess can be lent by those banks to other banks that have shortfalls. The interest rate that is paid by the borrowing banks is the federal fund rate.

Harman [31]3 years ago
8 0

Answer - Federal Funds Rate

Explanation;

The Fed sets a reserve requirement that banks must keep with them out of their deposits. Everyday they will have to meet this reserve requirement. When they do not, they have the option to borrow overnight from another bank that has excess reserves.

The rate that they will borrow these excess reserves at is the Federal Funds Rate. This rate is set by the Federal Open Market Committee (FOMC) of the Fed which does so based on the economic condition of the nation.

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Answer:

James will lose money, since his earnings will be lower than the interest that he must pay.

Explanation:

The capitalization (cap) rate is a ratio calculated by dividing the net operating income over the property asset value.

For example, if James is purchasing the property at $100,000, his net earning will be $7,500 per year (cap rate of 7.5%), but he will have to $8,000 in interests for the property. The interests are higher than the earnings, therefore the leverage is negative.

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Why is it important to gather facts from a variety of sources so you can make fair, objective decisions before delivering bad ne
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The situation may be disturbing, but solutions should not usually be based on emotion. Your first interpretation of the situation may not be the only valid view.

Don't try to sugarcoat the truth. It's best to be open and honest about what happened and what you're going to do to make it right. Remember that your attitude and the clarity of your message are two very important factors in this conversation. Be open, clear, and honest.

Bad news can be effectively clarified and explained by communicating it directly. D. Verbal communication of bad news includes instructions for later reference by the recipient of the bad news.

It's important to be open, honest, and empathetic. Provide all the facts you have and give your employees the time they need to digest the news and ask questions. Guarantee that you will do your best.

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2 years ago
A good example of ___________________ is a real estate business that shares data on new home purchases between the unit that sel
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The aggregate demand curve
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Answer:

<u>B. shows planned purchase rates of goods and services at various price levels.</u>

Explanation:

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Milk is used in the production of cheese. Cheese and tofu are close substitutes in consumption. Milk and oreos are complements i
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Milk is used in the production of cheese. Cheese and tofu are close substitutes in consumption. Milk and Oreos are complements in consumption. Suppose that the price of Oreos increases, how does this affect the market for tofu?

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<h3>Why does price decrease when demand increases?</h3>

If demand does not change, there is an inverse relationship between the supply of goods and services and the price. As the supply of goods and services increases with the same demand, prices tend to fall to lower equilibrium prices and higher equilibrium quantities of goods and services.

The relationship between price and demand is negative. H. They are inversely proportional. The inverse relationship means that when the price of a product goes up, the demand for that product goes down, and vice versa. This is due to the law of reducing marginal utility.

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