1.The Federal Funds rate

Select one:

a.is controlled by the nation's banks, so the Fed observes it carefully.

b.is a monetary policy target of the Federal reserve.

c.None of the above are correct.

d.is paid by the Fed to banks.

e.is paid by banks to the Fed.

2.The federal funds rate is

Select one:

a.the interest rate banks charge each other on overnight loans.

b.the interest rate on the 30-year treasury bond.

c.the interest rate on the 3-month Treasury bill.

d.another name for the real interest rate.

e.also known as the prime rate.