Drag each term to the correct location.

Question

(2 points)
Put responses in the correct input to answer the question. Select a response, navigate to the desired input and insert the response. Responses can be selected and inserted using the space bar, enter key, left mouse button or touchpad. Responses can also be moved by dragging with a mouse.
The interest rate banks charge each other for overnight lending.
The interest rate the Federal Reserve charges to banks for loans issued.
The purchase and sale of treasury and mortgage-backed securities with dealers.
The short-term purchase of securities with a dealer for the Federal Reserve to resell the securities at a later date.
The interest rate a bank charges to its best customers.
The funds a bank must hold against the deposit liabilities.

Answer 1

Here are the terms matched with their correct definitions:

1. The interest rate banks charge each other for overnight lending.

   • Answer: Federal Funds Rate

2. The interest rate the Federal Reserve charges to banks for loans issued.

   • Answer: Discount Rate

3. The purchase and sale of treasury and mortgage-backed securities with dealers.

   • Answer: Open Market Operations

4. The short-term purchase of securities with a dealer for the Federal Reserve to resell the securities at a later date.

   • Answer: Repurchase Agreement (Repo)

5. The interest rate a bank charges to its best customers.

   • Answer: Prime Rate

6. The funds a bank must hold against the deposit liabilities.

   • Answer: Reserve Requirements

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