Answer:
The correct answer is letter "C": the interest rate the Fed charges commercial banks for borrowing funds.
Explanation:
The discount rate is the amount of interest the Federal Reserve (Fed) charges private banks for short-term loans. Banks will often borrow from each other for short-term needs with central banks like the Fed typically acting as a lender of last resort. As a result, it likes to keep its discount rates somewhere above what private banks are charging each other.
