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Business, 15.04.2020 02:25 kayleahrayne

The discount rate is the interest rate on loans that the Federal Reserve makes to banks. Banks occasionally borrow from the Federal Reserve when they find themselves short on reserves. A lower discount rate [increases or decreases] banks' incentives to borrow reserves from the Federal Reserve, thereby [increasing or reducing] the quantity of reserves in the banking system and causing the money supply to [fall or rise].

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The discount rate is the interest rate on loans that the Federal Reserve makes to banks. Banks occas...
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