Which of the Following Statements Is Correct

question 168

Multiple Choice

Which of the following statements is correct?

• A)The Federal funds rate is derived based on the prime rate.
• B)The Federal funds rate is the rate banks charge their most creditworthy customers.
• C)The discount rate is the rate banks charge one another on overnight loans.
• D)The prime rate involves longer, more risky loans than the Federal funds rate.

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Definitions:

Huge Springs

Large natural outlets where groundwater flows out of the ground, often the result of an aquifer being filled to the point that the water overflows onto the land surface.

Hydrologic Cycle

The continuous movement of water on, above, and below the surface of the Earth, including processes such as evaporation, precipitation, and runoff.

Mid-Ocean Ridges

Undersea mountain ranges where new oceanic crust is formed through volcanic activity and seafloor spreading.

Hot Springs

Natural springs that discharge water heated by geothermal processes from the Earth's interior.