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andrey2020 [161]
3 years ago
10

1. The discount rate is the:________. a. lowest interest rate that banks can charge for loans to their most creditworthy custome

rs. b. interest rate at which banks can borrow reserves from the Federal Reserve. c. lowest interest rate that banks can charge for lending reserves to other banks or financial institutions. d. interest rate at which banks can borrow reserves from other banks. 2. If the Fed were to decrease the discount rate, banks will borrow:______. a. more reserves, causing an increase in lending and the money supply. b. fewer reserves, causing an increase in lending and the money supply. c. fewer reserves, causing a decrease in lending and the money supply. d. more reserves, causing a decrease in lending and the money supply.
Business
1 answer:
Nutka1998 [239]3 years ago
3 0

Answer(1)

<em>b. interest rate at which banks can borrow reserves from the Federal Reserve</em>

Explanation:

The discount rate is known in America as the rate of interest which a central bank charges on its loans and advances to a commercial bank. This loans and advances are from the federal reserve.

Answer (2)

<em>a. more reserves, causing an increase in lending and the money supply</em>

Explanation:

Excess lending from the national reserve due to a lowered discount rate  will lead to a reserve supply excess into commercial banks throughout the economy and expands the money supply .

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<h3>The complete question: </h3>

A publisher has copies of a philosophy book in its inventory, but it produces 1,000 copies of the book in august that it expects to sell in the upcoming academic year. the price of the book is $120. if the publisher actually sells 1,300 textbooks, then:

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