Primary credit is only a backup source of funds for healthy banks since
A) the primary credit rate is set above the federal funds rate.
B) restrictions as to its use limit its benefits.
C) the secondary credit rate pays 0.5% more.
D) banks must seek funds from other sources prior to requesting a discount loan.

Question

Quizplus · Accepted Answer

The primary credit rate is typically set above the federal funds rate, making it a more expensive option for banks, which encourages them to seek other funding sources first.

Primary Credit Is Only a Backup Source of Funds for Healthy