Question

Which term refers to the interest the Federal Reserve Bank (Fed) charges banks for loans? open‑market sale fractional banking reserve ratio money multiplier discount rate Select the charge the Fed levies on banks borrowing funds that would result in the smallest increase in the money supply. two percentage points above the private level one percentage point above the private level the same as the private level one percentage point below the private level two percentage points below the private level

Answer 1

Answer:

Which term refers to the interest the Federal Reserve Bank (Fed) charges banks for loans?

• discount rate

the discount rate is the interest rate that the Federal Reserve System charges banks for the loans it makes. The overnight rate or the federal funds rate is even lower, but it lasts a few hours only.

Select the charge the Fed levies on banks borrowing funds that would result in the smallest increase in the money supply.

• two percentage points above the private level

the higher the interest rate, the lower the increase in the money supply.