When the Fed reduces the discount rate, banks can obtain funds at a lower cost and use these funds to make more loans to their own customers: True.
The Fed is a short word for Federal Reserve and it can be defined as a federal government financial institution that was established by the Federal Reserve Act on the 23rd of December, 1913 by the U.S Congress.
Additionally, the Fed is just like all central banks in a country and as such, it is considered as a United States government agency that regulates banking activities, supervise and regulate banks, as well as control the issuance of currency in the United States of America.
In conclusion, banks in the United States of America are able to obtain funds at a lower cost and make more loans to their own customers when the discount rate is reduced or lowered by the Fed.
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Complete Question:
When the Fed reduces the discount rate, banks can obtain funds at a lower cost and use these funds to make more loans to their own customers.
group of answer choices
False
True
