17-80 Which of the Following Observations Concerning the Fed's Discount

question 21

Multiple Choice

17-80 Which of the following observations concerning the Fed's discount window is true?

• A)The facility is provided to meet DIs' permanent liquidity needs.
• B)Four lending programs are offered through the Fed's discount window.
• C)Primary credit is available to sound depository institutions on a very short-term basis.
• D)Secondary credit is available only to depository institutions that are eligible for primary credit.
• E)Eligible institutions for seasonal credit are big banks located in urban areas.

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Definitions:

Competitive Price-Searcher

Competitive price-searchers are firms that actively seek out the optimal pricing strategies in markets characterized by some level of product differentiation, aiming to maximize their profits.

Maximize Profits

A business strategy aimed at achieving the highest possible profit margins by optimizing production, pricing, and sales while minimizing costs.

Competitive Price-Searcher

A market participant who actively seeks the best price by comparing various sellers, typically in markets with some degree of monopolistic competition.

Market Price

The current rate for transactions involving the purchase or sale of assets or services.