Dancer9565 Dancer9565

04-01-2020
Business

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The _____________ (the interest rate banks charge each other on overnight loans) is highly sensitive to money market factors and well exemplifies the interaction of supply and demand for banking funds..

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Emhicee Emhicee

04-01-2020

Answer:

Federal funds rate

Explanation:

By law, banks are meant to have a reserve relative to a percentage of deposits but when the bank cannot meet its financial obligations, it borrows from the federal reserve.

The federal funds rate is the interest rate that a bank charges another bank or banks when it lend money to those banks from its reserves when it gives an overnight loan.

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