Which of the Following Is Correct Regarding the Discount Rate

question 2

Multiple Choice

Which of the following is correct regarding the discount rate?

• A)It is the interest rate that commercial banks charge their most creditworthy customers.
• B)It is the interest rate that thrift institutions charge for home mortgages.
• C)It is the interest rate at which depository institutions can borrow from the Federal Reserve.
• D)It is the interest rate set in the market for U.S.Treasury Bills.
• E)It is the prime interest rate.

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Definitions:

Consumer Surplus

The difference between the maximum price consumers are willing to pay and the price they actually pay. It is the net gain derived by the buyers of the good.

Cell-Phone Service

A service provided by telecommunications companies that enables mobile phone users to make and receive calls, texts, and use data.

Utility-Maximizing

A behavioral principle where consumers allocate their income to purchase a mix of goods and services that provides the highest overall utility.

Last Dollar

The final unit of currency spent or invested in a particular context, emphasizing its potential impact or value.