Explain the Difference Between the Discount Rate and the Federal

question 34

Essay

Explain the difference between the discount rate and the federal funds rate.If the Fed wants to lower one of these rates,which one can the Fed change by issuing an order? Describe in detail how the Fed helps to lower the other rate.

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Definitions:

Systematic Thinking

A cognitive approach that involves understanding and solving problems through a step-by-step process, considering all components and their relationships.

Rational

Based on reasoning or logic; pertaining to the ability to think, understand, and form judgments by a process of logic.

Step-by-step

A phrase describing a process or procedure that takes place gradually, one stage at a time.

Problem Solver

An individual or entity capable of analyzing issues, identifying solutions, and implementing strategies to address challenges effectively.