The Federal Funds Rate Is the Interest Rate

question 71

Multiple Choice

The federal funds rate is the interest rate:

• A) the Fed charges banks who borrow from it.
• B) banks charge each other for overnight loans on excess reserves held at the Fed.
• C) the U.S. Treasury charges banks that need emergency funds.
• D) the FDIC charges banks that need to borrow from it to meet depositor demands.

---

Definitions:

Significance Level

The probability of rejecting the null hypothesis when it is actually true, often denoted by alpha.

ANOVA Table

A table that displays the output of an Analysis of Variance, which shows statistical information such as sums of squares, degrees of freedom, mean squares, and F-statistics.

Mean Squares

The average of the squares of the deviations or differences from the mean, often used in variance analysis.

Sum of Squares

A statistical measure used in regression analysis and ANOVA; it quantifies the total variance in the data by summing squared deviations from the mean.