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.

---

Definitions:

Economic Entity

An organizational unit for which it is possible to separate financial information and which conducts economic activities independently.

Consolidated Financial Statements

The financial statements of a group in which the assets, liabilities, equity, income, expenses, and cash flows of the parent and its subsidiaries are presented as those of a single economic entity.

Ownership Interest

The right or claim an individual or entity has on assets, often evidenced by equity or shares in a company.

Parent

An entity that controls one or more entities.