Projecting that it might temporarily fall short of legally required reserves in the coming days, the Bank of Beano decides to borrow money from the Federal Reserve Bank in its district. The interest rate on the loan is called the
A) prime rate.
B) federal funds rate.
C) Treasury bill rate.
D) discount rate.

Question

Quizplus · Accepted Answer

The Bank of Beano is borrowing money from the Federal Reserve Bank, which is done through the discount window. The interest rate charged on such loans is called the discount rate. Therefore, Choice D is the correct answer. Choices A, B, and C refer to other interest rates that are not relevant to the scenario described.

Projecting That It Might Temporarily Fall Short of Legally Required