What happens when a country's central bank raises the discount rate for banks?A.Banks must pay the government interest on all cash they keep on hand.B.Banks must pay more for short-term loans from the government.C.Banks are required to sell all their treasury securities on the open market.D.Banks are forced to set aside more of their money instead of lending it.SUBMITarrow_backPREVIOUS

The Federal Reserve increases the discount rate in order to:A.make more treasury securities available for sale.B.encourage banks to increase their prime rates.C.make banks more likely to lend money to customers.D.increase the overall money supply in the economy.

The discount rate is the interest rate at which:  A. Commercial banks lend to the central bank  B. The central bank borrows from commercial banks  C. The central bank borrows from the government  D. The government borrows from commercial banks

How does the Federal Reserve discount rate affect the money supply?A.The Federal Reserve raises the rate in order to encourage banks to lend less.B.The Federal Reserve charges consumers less in order to discourage borrowing.C.The Federal Reserve charges consumers more in order to discourage borrowing.D.The Federal Reserve lowers the rate in order to encourage banks to lend less.SUBMITarrow_backPREVIOUS

What will happen in the money market if the Federal Reserve decreases the discount rate?Multiple choice question.Banks borrow more from the Fed and make more loans, causing the money supply to increase.Banks borrow less from the Fed and make fewer loans, causing the money supply to decrease.Banks borrow more from the Fed and make more loans, causing the money supply to decrease.Banks borrow less from the Fed and make fewer loans, causing the money supply to increase.

A central bank buys treasury securities at market rates in order to:A.increase the discount rate for private banks.B.decrease the amount of money banks hold in reserve.C.decrease the unemployment rate by hiring workers.D.increase the money supply in the economy.