The Federal Funds Rate Is

question 79

Multiple Choice

The federal funds rate is:

• A) equal to the rate of inflation.
• B) the interest rate at which banks borrow from the Federal Reserve.
• C) the interest rate at which banks borrow from and loan to each other overnight.
• D) an interest rate that is some fixed amount above the prime lending rate.
• E) the return to stock markets over the long term.

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Definitions:

Point Estimate

A solitary figure or statistical measure employed to approximate the worth of a population parameter.

Confidence Interval

A portfolio of values, extracted from sampling efforts, believed to encapsulate the undiscovered value of a population attribute.

Normal Distribution

A balanced probability distribution around the mean, demonstrating that occurrences are more frequent near the mean than away from it.

Margin of Error

An indicator of the precision of an estimate in statistics, showing the range within which the true value is expected to lie with a certain level of confidence.