The Interest Rate That the Fed Charges Banks That Borrow

question 50

Multiple Choice

The interest rate that the Fed charges banks that borrow reserves from it is the

• A)federal funds rate.
• B)discount rate.
• C)reserve requirement.
• D)prime rate.

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Definitions:

Demand Curve

A graph that shows the relationship between the price of a good and the quantity of that good that consumers are willing to purchase.

Ceteris Paribus

A Latin phrase meaning "all other things being equal," used in economics to isolate the effect of one variable change.

Producer Surplus

The gap between what sellers are prepared to take for a product or service and the actual amount they get.

Inelastic

This refers to a lack of sensitivity in the quantity demanded or supplied when the price changes.