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The discount rate is:

Athe interest rate banks charge other banks for loans.
Cthe percentage amount that the Federal Reserve discounts when it buys government securities.
Bthe interest rate the Federal Reserve charges for loans to commercial banks.
Da tool of fiscal policy.

Verified Answer :

meerkat18

The discount rate is b. the interest rate the Federal Reserve charges for loans to commercial banks.

The federal reserve facility, where commercial banks and other lending financial institution apply for their loan, is called the discount window.

The discount rate is applied on overnight loans of the commercial banks and other financial institution.

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