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AP® Macroeconomics

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Moderate

Reserve Requirement and Emergency Loans

APMACR-K46EYQ

If a bank were in financial jeopardy and did not have enough money in reserve at the end of a day, then which of the following choices is the CHEAPEST means of borrowing available to the bank?

A

Prime Rate direct from the Federal Government.

B

Discount Rate direct from the Federal Reserve.

C

Federal Funds Rate direct from another member bank.

D

Prime Rate direct from the Federal Reserve.

E

Nominal Rate from the Treasury Department.