The Interest Rate That the Fed Charges When It Makes

question 139

Multiple Choice

The interest rate that the Fed charges when it makes a last resort loan is the _ rate.

• A) federal funds
• B) reserve
• C) short- term
• D) discount

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Definitions:

Transfer Payments

These are payments made by the government to individuals or other entities without the government receiving any goods or services in return, such as welfare checks.

Government Budget Deficit

A situation where the government's expenditures exceed its revenues over a specified period of time, leading to borrowing or debt accumulation.

Federal Deficits

The financial situation in which the government's expenditures exceed its revenues in a given fiscal year.

Public Capital

Assets owned by the public sector or government, including infrastructure like roads, bridges, schools, and hospitals that are used for public services.