In 2008, the Fed Began Paying Banks Interest on the Reserves

question 168

Essay

In 2008, the Fed began paying banks interest on the reserves they held at the Fed.
How did this change the incentives banks had for making loans?

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Definitions:

Rejection Region

The range of values for which a null hypothesis is rejected in a hypothesis testing scenario.

Top Speed

The maximum velocity that an object or entity can reach under specific conditions.

Normal Distributions

A probability distribution that displays symmetry around the mean, indicating data closer to the mean occurrence more frequently than data far from the mean.

Mean Commercial Time

The average duration of commercials or advertisements played during a television program or on a digital platform.