When Banks Borrow from the Fed

question 21

Multiple Choice

When banks borrow from the Fed:

• A) they pay an interest rate called the Federal Funds rate.
• B) interest rates rise.
• C) it decreases the availability of banks to extend new loans.
• D) it increases the money supply

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Definitions:

Stereotypes

Oversimplified generalized beliefs about a particular group of people or things.

Diminished Judgement

A state or condition where a person's ability to make considered decisions or evaluations is impaired or reduced.

Sorting

The process of arranging items in a systematic order or classifying them into categories.

Characteristics

Traits or features that distinguish someone or something from others.