Banking and Interest Rates

The amount that all banks have to keep in the reserve and they can't loan out to people

• monetary lending

• fiscal spending

• reserve requirement

• lending policy

The interest rate the FED charges banks to borrow money will be lowered to help the economy grow and raised to slow the economy

• reserve requirement

• discount rate

• bank rate

• monetary bank

The manipulation of the money supply in order to influence the cost and the availability of credit is

• Banking Policy

• Fiscal Policy

• Monetary Policy

• Spending Policy

The discount rate and the federal funds rate are both types of what?

• quantitative easing

• interest rates

• monetarism

• passive fiscal policies

an institution that oversees and regulates the banking system and controls the monetary base

• Board of Governors

• central bank

• open market committee

• monetary policy

Oversees the entire banking system, 7 members appointed by the president and approved by the Senate; serve 14 year terms

• Board of Governors

• open market committee

• Federal Reserve

• FDIC

The discount rate is ______

• the interest rate banks pay to other banks to balance their overnight funds

• the interest rate the Fed charges on loans to banks

• the interest rate paid by customers to the Fed

• none of these is correct

What is the primary function of a central bank in relation to interest rates?

• To set the interest rates for personal loans

• To regulate the national interest rates

• To provide loans to small businesses

• To determine the interest rates for credit cards

Which of the following is a tool used by central banks to control inflation?

• Open market operations

• Taxation policies

• Government spending

• Public borrowing

What is the term for the interest rate at which banks lend to each other overnight?

• Prime rate

• Federal funds rate

• Discount rate

• Base rate