The Discount Rate Is the Interest Rate Charged By

question 88

Multiple Choice

The discount rate is the interest rate charged by:

• A) major banks to their best customers.
• B) banks for overnight loans to other banks.
• C) the Fed on loans of reserves to banks.
• D) banks for loans of less than 24 hours.

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Definitions:

Perfectly Inelastic

Describes a situation in demand or supply where the quantity demanded or supplied does not change in response to a price change.

Demand Schedule

A table that shows the quantity of a good that consumers are willing to buy at different prices.

Parallel

Lines or paths that remain the same distance apart at every point, never meeting or intersecting.

Elasticity Coefficient

A numerical value that measures the responsiveness of the quantity demanded or supplied of a product to a change in one of its determinants, such as price or income.