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HELP!! please!
1) Compare and contrast the federal funds rate, the discount rate, and the prime rate

2)Analyze the relationship between
the federal budget and national debt. Explain how a federal budget deficit and a federal budget
surplus influence levels of national debt.

Sagot :

myamcginnis30

Answer:

1) The discount rate is not an index, so for loans that they make to each other banks use the federal funds rate, without adding a margin. The prime rate is a short-term rate; but not as short as the discount rate, which is typically an overnight lending rate. The discount rate is not publicized in a general publication.

2) One year's federal budget deficit causes the federal government to sell Treasury bonds to make up the difference between spending programs and tax revenues. The dollar value of all the outstanding Treasury bonds on which the federal government owes money is equal to the national debt. The deficit is not the debt. The difference between the deficit and the debt lies in the time frame. The federal deficit (or surplus) refers to what happens with the federal government budget each year. The public (or Federal government) debt is accumulated over time; it is the sum of all past deficits and surpluses.

Explanation:

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