The Interest Rate That the Fed Charges Banks That Borrow

question 50

Multiple Choice

The interest rate that the Fed charges banks that borrow reserves from it is the

• A)federal funds rate.
• B)discount rate.
• C)reserve requirement.
• D)prime rate.

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Definitions:

Workers' Wage

The monetary compensation paid to a worker for their labor.

VMPL

The Value of the Marginal Product of Labor, representing the additional income generated from employing one more unit of labor.

MPL

Marginal Product of Labor refers to the additional output produced as a result of hiring one more unit of labor.

MC

Abbreviation for Marginal Cost, which refers to the increase or decrease in the total cost of production when the quantity produced is adjusted by one additional unit.