select the correct answer. what is the federal funds rate? a. the interest rate that the federal reserve…

select the correct answer. what is the federal funds rate? a. the interest rate that the federal reserve charges commercial banks for overnight loans b. the interest rate that the federal reserve charges commercial banks for long - term loans c. the interest rate that banks charge each other for long - term loans d. the interest rate that banks charge each other for overnight loans

select the correct answer. what is the federal funds rate? a. the interest rate that the federal reserve charges commercial banks for overnight loans b. the interest rate that the federal reserve charges commercial banks for long - term loans c. the interest rate that banks charge each other for long - term loans d. the interest rate that banks charge each other for overnight loans

Answer

Brief Explanations:

The federal funds rate is the interest rate at which depository institutions (banks) lend reserve balances to other banks overnight. It is not related to loans from the Federal Reserve to banks or long - term inter - bank loans.

Answer:

D. the interest rate that banks charge each other for overnight loans