The Discount Rate Set by the Fed

question 23

Multiple Choice

The discount rate set by the Fed

• A) is the rate of interest charged member banks when they borrow from the Fed to meet their reserve requirements.
• B) is the difference between the rate of interest charged to the government for borrowing from the Fed and the rate of interest charged to commercial customers.
• C) is the rate at which banks are required to borrow from each other to maintain their compliance with their reserve requirements.
• D) is the rate at which the Fed discounts the future when it makes its policy decisions.
• E) none of the above.

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