Define the Federal Funds Rate and the Discount Rate,by Explaining

question 40

Essay

Define the federal funds rate and the discount rate,by explaining the difference between the two types of loans involved.Comment on which type of loan is relied on the least and why.

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Definitions:

Poorest

Referring to the individuals or groups with the lowest income and wealth levels in a society.

Soft Loans

Loans that are offered with more favorable terms than market loans, typically including lower interest rates and longer repayment periods.

Developing Countries

Nations with a lower level of industrialization, lower standard of living, and lower Human Development Index compared to developed countries.

International Development Association

A part of the World Bank that helps the world’s poorest countries by providing loans and grants for projects and programs that boost economic growth and improve living conditions.