Which of the Following Statements Is True Regarding the Fed's

question 36

Multiple Choice

Which of the following statements is true regarding the Fed's procedures for operating the discount window?

• A) The Fed's operating procedures and paying interest on reserves contains the federal funds rate between the interest rate paid on reserves and the discount rate.
• B) The Fed's operating procedures and paying interest on reserves creates more fluctuation in the federal funds rate than if they simply didn't pay interest on reserves.
• C) The Fed's operating procedures and paying interest on reserves has no impact on the fluctuation of the federal funds rate.
• D) None of the above is correct.

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