Multiple Choice
Which of the following statements is true regarding the Fed's procedures for operating the discount window?
A) The Fed's operating procedures and paying interest on reserves contains the federal funds rate between the interest rate paid on reserves and the discount rate.
B) The Fed's operating procedures and paying interest on reserves creates more fluctuation in the federal funds rate than if they simply didn't pay interest on reserves.
C) The Fed's operating procedures and paying interest on reserves has no impact on the fluctuation of the federal funds rate.
D) None of the above is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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