In Practice, the Federal Reserve Keeps the Discount Rate Close

question 66

Multiple Choice

In practice, the Federal Reserve keeps the discount rate close to the ________ rate in order to avoid large swings in borrowed reserves by banks.

• A) inflation
• B) six-month Treasury bill
• C) federal funds
• D) prime

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Definitions:

Slave Power

A term used to describe the perceived political power held by slave owners in the United States pre-Civil War, influencing legislation and government.

Increase of Fear

A situation where the level of anxiety, worry, or dread in a population or individual grows significantly, often in response to real or perceived threats.

Second Bank of the United States

A federal institution that operated from 1816 to 1836, aimed at stabilizing and improving the national economy but faced opposition, leading to its closure.

Dred Scott Decision

A landmark 1857 U.S. Supreme Court case that ruled African Americans, whether enslaved or free, could not be American citizens and had no rights to sue in federal court.