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The interest rate the fed charges for overnight loans is known as the?
discount rate (apex)
Which of the following actions is most likely to result in in an increase in the money supply?
The discount rate on overnight loans is lowered.
What best explains why raising the discount rate affects the money supply?
When the discount rate is high, banks keep more reserves on hand to avoid paying a lot to borrow from the Fed... Apex :)When the discount rate is high, banks keep more reserves on hand to avoid paying a lot to borrow from the Fed.
Does the lowered benchmark fed funds rate affect the Applicable Federal Rates?
It will. The AFR resets monthly, and movements in AFR will lage movements in the fed funds rate. The rate reduction is not linear, however. A 50 bps cut in the fed funds rate will not translate to a smaller reduction in the AFR.
Describe the effect that The Fed raises the discount rate from 5 percent to 10 percentwill have on the money supply?
If the Fed raises the discount rate from five percent to ten percent, there would be less money supply. This is because it is a contractionary monetary policy.
What was the change in the discount rate between August 2001 to December 2001?
Between August 2001 and December 2001, the Federal Reserve lowered the discount rate multiple times in response to economic conditions and the aftermath of the September 11 attacks. The discount rate decreased from 3.75% in August to 1.75% by December 2001, reflecting the Fed's efforts to stimulate the economy during a period of uncertainty and downturn. This series of cuts aimed to encourage lending and investment to support economic recovery.
What is the difference between federal funds rate and the discount rate?
The Federal Funds rate abbriviated as Fed Funds is the overnight loan rate between banks. The Discount Window is the Federal Reseve Bank of New York's overnight interst rate charged to banks from the Federal Reserve, called the discount window rate.
What is the current fed funds rate?
The discount rate is the rate of interest that Federal Reserve Banks charge member banks for overnight loans. Currently the rate is.75%. There are rumors that the rate will rise a certain number of basis points near the end of February, 2014.
What most likely effects the Fed lowering the discount rate on overnight loans?
An increase in the money supply
What most likely effect of the Fed lowering the discount rate on overnight loans?
An increase in the money supply
What describes the most likely effect of the Fed lowering discount rate on overnight loans?
An increase in the money supply
What is interest rate the federal reserve charges on its loans?
this answer is different from institution to institutions ... The Fed's board of governors raised the discount rate on loans made directly to banks by a quarter of a percentage point, to 0.75 percent from 0.50 percent ...Discount Rate.
