What is the federal funds rate?

process by which banks record whose account gives up money and whose account receives money when a customer writes a check

an individual's or company's total assets minus liabilities

interest rate banks charge each other for loans

rate the Federal Reserve charges for loans to commercial banks

Question

Advanced Placement (AP)

Haleigh Johns

23 December, 14:45

What is the federal funds rate?

process by which banks record whose account gives up money and whose account receives money when a customer writes a check

an individual's or company's total assets minus liabilities

interest rate banks charge each other for loans

rate the Federal Reserve charges for loans to commercial banks

+1

Answers (1)

Know the Answer?

Kathleen Avery · Answer 1

interest rate banks charge each other for loans

Explanation:

Federal funds rate are interest rates that banks charge the other banks when lending them money for their reserved balances on an oversite basis.

This means that any money that is excess for a bank is their reserve and should be lended to other banks that run shot of funds.

This money is held in non interest generating accounts in the federal reserve bank.