This statement that has been made here about the discount rate is true about the discount rate. The discount rate is the interest rate on loans that the federal reserve makes to banks. Banks occasionally borrow from the federal reserve when they find themselves short on reserves. A lower discount rate.
This is the term that is used to refer to the minimum rate of interest that the federal reserve bank would set for the banks in the country.
Normally a discount would mean that the things would be cheaper and people would have to spend less for the things that they buy. Hence we can say that The discount rate is the interest rate on loans that the federal reserve makes to banks. Banks occasionally borrow from the federal reserve when they find themselves short on reserves. A lower discount rate.
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