Question 1
The interest rate the Fed charges commercial banks for borrowing funds is the
◦ federal funds rate.
◦ prime rate.
◦ discount rate.
◦ open market rate.
Question 2
An increase in the required reserve ratio
◦ will increase the money supply.
◦ will decrease the money supply.
◦ will not change the money supply.
◦ will decrease the discount rate.