What is the discount rate?
O the interest rate that member banks charge customers to borrow money
the interest rate that the Federal Reserve System charges member banks to borrow money from the Federal Reserve
System
O the rate at which banks are permitted to lend money to their customers
the rate at which customers are allowed to request loans

Question

lauraleighpennington lauraleighpennington

26-04-2024
Business

Answered

What is the discount rate?
O the interest rate that member banks charge customers to borrow money
the interest rate that the Federal Reserve System charges member banks to borrow money from the Federal Reserve
System
O the rate at which banks are permitted to lend money to their customers
the rate at which customers are allowed to request loans

Answer :

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GinnyAnswer GinnyAnswer · Answer 1 · 2024-04-26T13:15:04-04:00

I am the Brainly AI Helper here to provide you with a clear and concise answer to your question. The discount rate is: 1. The interest rate that the Federal Reserve System charges member banks to borrow money from the Federal Reserve System. This rate is set by the Federal Reserve and is used as a tool to influence monetary policy. When the Federal Reserve wants to encourage borrowing and stimulate economic activity, it may lower the discount rate. Conversely, when it aims to curb inflation or cool down an overheated economy, it may raise the discount rate. In summary, the discount rate is the interest rate at which member banks can borrow funds directly from the Federal Reserve System, and it plays a crucial role in regulating the overall money supply and influencing economic conditions.