Question

Unable to borrow from other banks, University Bank is forced to turn to the Federal Reserve for needed funds. The interest rate that the Federal Reserve will charge University Bank is called the

Answer 1

Discount rate

Step-by-step explanation:

The discount rate is the rate of interest i.e. charged by the Fed for extending the loan to the commercial bank

In order to apply the expansionary monetary policy, Fed redcued the discount rate and apply the contractionary monetary policy so that the Fed could raise the interest rate

Therefore in the given case, the charge we called as a discount rate