Lowering the Discount Rate Has the Effect Of

question 13

Multiple Choice

Lowering the discount rate has the effect of:

• A) Turning required into excess reserves
• B) Turning excess into required reserves
• C) Making it less expensive for commercial banks to borrow from central banks
• D) Forcing commercial banks to call in outstanding loans from their best customers

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Definitions:

Congress

The law-making division of the United States federal government, which includes the Senate and the House of Representatives.

Establishment Clause

A provision in the First Amendment of the U.S. Constitution that prohibits the government from establishing an official religion or favoring one religion over another.

Secular Purpose

Refers to a non-religious or non-spiritual objective or function, often mentioned in the context of laws or policies to ensure neutrality.

Government Entanglement

A situation where the actions, policies, or laws of a government are deeply involved or intertwined with a private entity or religious organization, raising constitutional concerns.