In Practice, the Federal Reserve Keeps the Discount Rate Close

question 66

Multiple Choice

In practice, the Federal Reserve keeps the discount rate close to the ________ rate in order to avoid large swings in borrowed reserves by banks.

• A) inflation
• B) six-month Treasury bill
• C) federal funds
• D) prime

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Definitions:

Deceleration

A decrease in the speed or rate of an activity or process; slowing down.

Vocational Activity

Activities related to acquiring job skills or engaging in a profession, often involving formal education and training.

Next Decade

The upcoming or following ten-year period from the current date.

Professional and Service

relates to occupations and industries focused on providing expertise, support, and services to others, including healthcare, education, and business services.