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Rainbow [258]
3 years ago
8

The discount rate refers to which tool of monetary policy?

History
1 answer:
damaskus [11]3 years ago
7 0

Answer:

C. The ability to change the cost banks have to pay to borrow money

Explanation:

The federal discount rate may be defined as the interest rate that are charged by the Federal bank to the other banks or financial institutions who borrow money from them. This set by the governors' of the Federal Reserve's board. Thus it is the tool in the monetary policy that change the cost the banks have to pay to the Federal bank for the borrowed funds.

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