The rate the feds charges members banks for short term loans is called:
A.reserve requirement
b. discount rate
c. margin rate
d. federal rate
My answer is B Discount rate
can someone please verify...thanks in advance
Right.
Thank you Ms. Sue
You're welcome, Joan.
You are correct, the rate the Federal Reserve charges member banks for short-term loans is called the discount rate. Here's how you can verify the answer:
1. Reserve Requirement: The reserve requirement refers to the portion of deposits that banks are required to hold as reserves. It is not directly related to the rate charged by the Federal Reserve for short-term loans.
2. Margin Rate: The margin rate typically refers to the interest rate charged by brokerage firms to borrowers who borrow money to purchase securities. It is not related to the Federal Reserve's rate for short-term loans.
3. Federal Rate: There is no specific term called the "federal rate" related to the Federal Reserve's loans.
To summarize, the correct answer is B. Discount rate.