1. The discount rate is the
A. targeted inflation rate for an economy
B. nominal interest rate charged by financial intermediaries when they advance loans.
C. interest rate that the Fed charges on the loans it makes.
D. ongoing taxation rate in an economy.
2. The main liability on the Federal Reserve's balance sheet is
A. capital. B. the monetary base. C. securities. D. discount loans.
3. Third Bank has reserves of $12.3 million and transaction accounts of $115 million. If required reserves are 10 percent of transactions accounts, Third Bank has excess reserves of
A. $0. B. $0.8 million. C. $0.08 million D. $0.8 million