Question

The federal funds rate is

Group of answer choices

both the rate of interest that commercial banks charge each other for overnight loans and is determined by the supply and demand of excess reserves in the market for federal funds

the rate of interest that Fed banks charge each other for overnight loans

is determined by the supply and demand of excess reserves in the market for federal funds

the rate of interest that Fed banks charge commercial banks for overnight loans

the rate of interest that commercial banks charge each other for overnight loans

Question 29 1 pts

Open market operations involve

Group of answer choices

charging interest on overnight loans

accepting deposits from member banks

lending money to member banks

the Fed's purchase & sale of government securities

Question 30 1 pts

The federal funds (target) rate is currently

Group of answer choices

negative

in a range of 1.50 to 1.75%

in a range of 1.75 to 2.0%

in a range of 0 to 0.25%

Question 31 1 pts

The discount rate is

Group of answer choices

the rate of interest that Fed banks charge commercial banks for overnight loans

the rate of interest that commercial banks charge each other for overnight loans

the rate of interest that Fed banks charge each other for overnight loans

the same thing as the “prime rate”

Question 32 1 pts

The reserve ratio (reserve requirements) is

Group of answer choices

the fraction of its loans banks hold as reserves

the fraction of its loans that a bank is requires to hold

all are correct

the fraction of its deposits that banks must hold as reserves

Answer 1

29) Option"b " is correct i.e the rate of interest that Fed banks charge each other for overnight loans

The discount rate / Fund rate refers to the rate  that the Federal Reserve Banks charge when they make collateralized loans, usually overnight

29) Option"D " is correct i.e the Fed's purchase & sale of government securities

Open market operations refer to which when central bank purchase & sale of government securities to control the money supply in the economy

30) Option"D " is correct i.e in a range of 0 to 0.25%

The current fund rate this week is 0.25 and a month ago is also same as 0.25

31) Option"c " is correct i.e the rate of interest that Fed banks charge each other for overnight loans

The discount rate refers to the rate  that Federal Reserve Banks charge when they make collateralized loans , usually overnight

32) Option"d" is correct i.e the fraction of its deposits that banks must hold as reserves

when the commercial bank keep the reserve with the central bank of the total deposit is known as the reserve ratio or reserve requirement

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