The discount rate is
A) the interest rate paid when a bank borrows reserves from another bank.
B) the interest rate paid when a commercial bank borrows reserves from the Fed.
C) the reduction in the interest rate given to the bank's best customers.
D) another name for the long-term interest rate.
E) the interest rate the Fed pays banks for the reserves the banks keep at the Fed.
B
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If the money rate of interest is 9 percent and the real rate of interest 6 percent, the inflationary premium is
a. 3 percent. b. 6 percent. c. 9 percent. d. 12 percent.
Consider Figure 8.9. If Becky's payoff in the top rectangle were 300 instead of 90, the outcome of the game would be that:
A. both choose a high price. B. both choose a low price. C. Becky chooses a high price and David chooses a low price. D. David chooses a high price and Becky chooses a low price.