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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
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Answer #1

Discount rate is the rate at which the Federal reserve Bank charges to the commercial banks

Federal fund rate in the simple meaning is the interest rate which is charged by one commercial bank to another commercial bank on the overnight basis

It is the target interest rate that is set by the Federal open Market committee for the commercial banks that borrow and lend from their excess reserves

The Federal open Market committee generally set Federal fund rate eight times in a year

Hence the correct answer is option B

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