Question

Compare and contrast the federal funds rate, the discount rate, and the prime rate.(4 points) explain in 3 sentences
GPT 3.5
The Federal Funds rate is the interest rate at which depository institutions lend to other depository institutions overnight. It is determined by the Federal Reserve and is used as a tool to manage monetary policy and control inflation. The Discount rate is the interest rate at which the Federal Reserve lends to commercial banks and acts as a safety net for banks facing liquidity issues. Lastly, the Prime rate is the interest rate that commercial banks offer to their most creditworthy customers. It serves as a benchmark for many short-term consumer loan rates and can influence other interest rates in the economy.