When the Fed Lowers the Discount Rate, It Makes It

question 56

Multiple Choice

When the Fed lowers the discount rate, it makes it

• A) cheaper for banks to borrow from each other.
• B) cheaper for banks to obtain additional reserves by borrowing from the Fed.
• C) more difficult for banks to accept deposits.
• D) more difficult for banks to extend loans.

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Definitions:

Lewis Acid

A substance that can accept a pair of electrons to form a covalent bond, typically metal ions or electron-deficient molecules.

4-oxohexanoic Acid

A six-carbon carboxylic acid with an additional oxo group (carbonyl) on the fourth carbon, making it an intermediate in various biosynthesis processes.

Electrophilic

Describes chemical species that are attracted to electrons and tend to accept electrons during chemical reactions.

Benzaldehyde

An aromatic aldehyde with a formula of C6H5CHO, known for its almond-like aroma.