The Interest Rate on Short-Term Loans Between Banks Is Known

question 27

Multiple Choice

The interest rate on short-term loans between banks is known as the

• A)primary credit discount rate.
• B)federal funds rate.
• C)commercial paper rate.
• D)T-bill rate.

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Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered or refunded, and should not influence current or future decisions.

Variable Costs

Costs that change in proportion to the level of production or service activity.

Fixed Costs

Expenses that remain constant regardless of the amount of production, like lease payments or wages.

Marginal Costs

The cost of producing one additional unit of a product, which varies depending on the level of production.