The Federal Reserve Bank, or the Fed, is able to adjust which interest rate?

Question

BlackTom AI · Accepted Answer

The question asks which interest rate the Federal Reserve Bank, or the Fed, has the power to adjust.
Option 1: Fed Fund Rate. This phrase likely refers to the federal funds rate, which is the target interest rate set by the Federal Open Market Committee (FOMC) and influenced by the Fed’s open market operations. However, the Fed does not directly set the fed funds rate; it targets it and uses tools to move the actual rate toward that target. This makes the option somewhat misleading.
Option 2: Prime Rate. The prime rate is the interest rate that commercial banks charge their most creditworthy customers, and it is influenced by the federal funds rate but is not directly set by the Fed. Banks determine the prime rate based on market conditions and the federal funds rate, so this is not a direct Fed adjustment.
Option 3: LIBOR. LIBOR (or its successor in practice, such as SOFR) is a benchmark rate used to price many loans and derivatives globally. It is not controlled or directly adjustable by the Federal Reserve; it is set by interbank submissions and market expectations, not by Fed policy actions.
Option 4: Discount Rate. The discount rate is the interest rate the Federal Reserve Banks charge when lending to banks and other depository institutions. This rate is directly set by the Fed’s regional banks and is a monetary policy tool the Fed can adjust to influence lending and liquidity.
In summary, among the options, the only rate that the Fed directly controls and can adjust is the discount rate, whereas the others are influenced by Fed policy but not directly set by the Fed itself.

The Federal Reserve Bank, or the Fed, is able to adjust which interest rate?单项选择题

类似问题

In August 2021, which type of consumer loan had the HIGHEST interest rate?

Question at position 17 In exchange for partial payment of a property’s income, a lender would most likely offer a higher interest rate?TrueFalse

A _ APR will result in a _ true cost of credit.

Which of the following statement is true?

Effective annual rate (EAR) is ………… annual percentage rate (APR) when interest is paid many times a year.

Which one of the following statements concerning interest rates is correct?

Which one of the following statements concerning interest rates is correct?

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单