The Discount Window Is A

question 38

Multiple Choice

The discount window is a:

• A) lending facility that allows any bank to borrow reserves from the Fed.
• B) lending facility that banks can use at specified times to borrow reserves needed to meet reserve requirements.
• C) large banking transaction that is associated with lower risk, and therefore qualifies for lower interest rates.
• D) situation in which large banks offer a lower interest rate to attract more borrowers.

---

Definitions:

Cash Payments

Outflows of cash to settle obligations or purchase goods and services, including paying bills, salaries, and other expenses.

Indirect Method

A cash flow statement reporting approach that adjusts net income for the effects of transactions not involving cash flow to compute operating cash flow.

Operating Activities

Business activities and transactions related to the core operations of a company, including revenue-generating and expense activities.

Prepaid Expenses

Expenses paid in advance for goods or services, recognized as assets until the benefits are realized or consumed.