When the fed auctions and loans reserves using the term, Ask an Expert

Economics

When the Fed auctions and loans reserves using the term auction facility, what determines the interest rate that will be charged for those reserves?

The interest rate of the highest bidder.
The interest rate of the lowest bidder whose bid is accepted.
The interest rate of the lowest bidder, regardless of whether or not the bid is accepted.
Each bank with an accepted bid is charged whatever interest rate it bid.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M938509

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