Final answer:
The interest rate the Federal Reserve charges on loans to member banks to enable them to keep adequate funds in reserve is called the discount rate. It is one of the tools used by the Federal Reserve to conduct monetary policy.
Step-by-step explanation:
The interest rate the Federal Reserve charges on loans to member banks to enable them to keep adequate funds in reserve is called the discount rate. The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility, known as the discount window. It is one of the tools used by the Federal Reserve to conduct monetary policy.