According to the text, the Fed currently sets the discount rate 1 percentage point below the...

Question:

According to the text, the Fed currently sets the discount rate 1 percentage point below the federal funds rate. True or false?

The Discount and Federal Funds Rates

The discount rate and the federal funds rate are key interest rates that underpin the monetary policies of the Fed. Knowledge of how these rates are set and the roles they play is crucial to understanding the monetary policy process.

Answer and Explanation:

The Fed currently sets the discount rate 1 percentage point below the federal funds rate. False.

The discount rate is typically set above the federal...

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The Discount Rate & Monetary Policy: How Banks Can Borrow Money from the Federal Reserve

from Economics 102: Macroeconomics

Chapter 12 / Lesson 5
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