A bank finds itself short of required reserves and therefore borrows from another commercial bank. The interest rate on this loan is
a. zero.
b. the prime rate.
c. the discount rate.
d. the federal funds rate.
e. the required reserve ratio.
D
Economics
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Which of the following is an example of fiscal policy?
A) a reduction in the money supply. B) a reduction in the federal funds rate. C) a reduction in lump-sum taxes. D) an increase in the physical stock of capital.
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Attempts to fine-tune the economy through counter-cyclical monetary policy
A) demonstrated their effectiveness in the 1930s. B) demonstrated their effectiveness during World War II. C) demonstrated their effectiveness between 1945 and 1960. D) have not yet demonstrated their effectiveness.
Economics