Question

Where do commercial

banks go to
get loans when they don't have
enough money to give out?
A. Federal Reserve Banks
B. Wealthy individuals
C. Big businesses
D. Profits from the stock market

Answer 1

Answer: the Federal Reserve System (FRS)

Explanation: Commercial banks borrow from the Federal Reserve System (FRS) to meet reserve requirements or to address a temporary funding problem. The Fed provides loans through the discount window with a discount rate, the interest rate that applies when the Federal Reserve lends to banks.