Asked by
Ankit kumar
on Nov 11, 2024
Verified
A higher discount rate generally decreases excess reserves.
Excess Reserves
The capital reserves held by a bank or financial institution in excess of what is required by regulators, laws, or internal controls.
Discount Rate
The interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window.
- Develop an understanding of how monetary policy mechanisms are utilized by the Federal Reserve to affect the economic landscape.
- Gain an understanding of how the reserve requirement and discount rate influence banking operations.
Verified Answer
AB
Learning Objectives
- Develop an understanding of how monetary policy mechanisms are utilized by the Federal Reserve to affect the economic landscape.
- Gain an understanding of how the reserve requirement and discount rate influence banking operations.