Question

Banks can borrow from each other on the federal funds market or borrow from the Fed....

Banks can borrow from each other on the federal funds market or borrow from the Fed. Banks borrow far more on the federal funds market than from the Fed. You can borrow from your friends or from your parents. From whom are you more likely to borrow? Why do you think banks prefer to borrow from each other?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. The federal funds market is the market in which A. banks borrow from the Federal...
1. The federal funds market is the market in which A. banks borrow from the Federal Reserve Banks. B. US securities are bought and sold. C. Federal Reserve Banks borrow from one another. D. banks borrow reserves from one another on an overnight basis 2. If a corporation goes bankrupt, A. stockholders must honor the debts to bondholders out of personal assets if necessary. B. neither stockholders nor bondholders receive any money. C. bondholders get paid from the sale of...
The Federal Funds rate is the interest rate that the Fed charges banks for loans banks...
The Federal Funds rate is the interest rate that the Fed charges banks for loans banks charge each other for overnight loans banks charge each other for long term loans banks charge the Fed for loans
The federal funds market refers to the market where​ ________. A. banks obtain loans of reserves...
The federal funds market refers to the market where​ ________. A. banks obtain loans of reserves from one another B. the Fed obtains loans of reserves from the central banks of other nations C. there are no predetermined rates of interest on loans and the highest bidding borrower gets the loan D. the federal government borrows overnight funds from the Fed
The federal funds rate is the interest rate at which: Group of answer choices banks borrow...
The federal funds rate is the interest rate at which: Group of answer choices banks borrow funds directly from the Federal Reserve. banks borrow from other banks with excess reserves. the influential companies borrow from banks. households' savings are invested in the Federal Reserve.
The Federal funds rate is: The interest rate that banks charge one another for short-term (typically...
The Federal funds rate is: The interest rate that banks charge one another for short-term (typically overnight) loans. When the Federal Reserve uses open-market operations to sell government bonds, the quantity of reserves in the banking system increases, banks' need to borrow from each other rises , and the federal funds rate increases. The interest rate that banks charge one another for short-term (typically overnight) loans. When the Federal Reserve uses open-market operations to sell government bonds, the quantity of...
The discount rate is usually lower than the federal funds rate because the Federal Reserve wants...
The discount rate is usually lower than the federal funds rate because the Federal Reserve wants to encourage banks to borrow and lend from each other, rather from the Fed. True False
1. When the Fed purchases government bonds, that tends to ___ the federal funds rate and...
1. When the Fed purchases government bonds, that tends to ___ the federal funds rate and ___ the prime rate. a. increase; increase b. increase; decrease c. decrease; increase d. decrease; decrease e. None of the above 2. How does the Federal Reserve affect the supply of money using open market operations? a. The Fed increases the reserve requirements of bank and thus banks must obtain additional funds from the Fed. b. The Fed buys government bonds from banks, which...
1. Banks borrow from / lend to each other in the inter-bank market. True or False
1. Banks borrow from / lend to each other in the inter-bank market. True or False
Explain whether you believe banks' participation in the fed funds market is beneficial or not. Are...
Explain whether you believe banks' participation in the fed funds market is beneficial or not. Are there better alternatives?
You are given the following information about the market for reserves. The current federal funds rate...
You are given the following information about the market for reserves. The current federal funds rate is 1.5%, the discount rate is 1.75%, the interest rate paid on reserves is 1.25%, and the Fed owns $350 billion in government securities. Are there any discount loans outstanding? Why or why not? Suppose the increase in economic activity meant that banks started to increase their lending to businesses. Banks are making loans rather than holding extra cash. Select all that apply. Question...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT