Sia
Question
Macroeconomics
Posted 7 months ago
Which of the following best describes the federal funds rate?
Choose 1 answer:
(A) The interest rate that the Federal Reserve pays for required reserves
(B) The interest rate that the Federal Reserve charges banks for shortterm loans
C) The interest rate banks charge other banks for short-term loans
(D) The fraction of deposits that a bank must keep deposited at the Federal Reserve
(E) The interest rate banks charge other banks for long-term loans
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Answer from Sia
Posted 7 months ago
C
Key Concept
Federal Funds Rate
Explanation
The federal funds rate is the interest rate at which depository institutions lend reserve balances to other depository institutions overnight on an uncollateralized basis.
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