At the close of business Main Street Bank did not have the required funds needed

Question

At the close of business Main Street Bank did not have the required funds needed for its reserve Street Bank called a neighboring bank and asked to borrow money overnight. The lending bank agreed, but charged Main Street Bank The president of Main A few days later Main Street Bank found that it again needed to call the neighboring bank and asked to borrow money overnight. This time the lending bank declined. Main Street Bank then contacted the Fed who agreed to lend them the needed funds, but charged Click to

Explanation / Answer

First blank: Federal Funds rate (FFR)
Explanation: FFR is the interest rate at which banks lend to other banks for an overnight.

Second blank: Discount Rate
Explanation: The Fed also maintains the discount window through it can lend money to banks and other depository institutions at a discount rate

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