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All right, we're doing problem number six.
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From section two of chapter 15, it's asking us, in 2015, one article in the wall street journal discussed the possibility a september quarter point increase in the fed's range for overnight target rates, while another article noted the u .s.
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Central bank's discount rate has been set at 0 .75 % since february 2010.
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Now there's parts a through c, but a is asking us, what is the name of the fed's target rate? the name of the fed's target rate, as we just saw, is the...
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Federal funds rate.
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It's the federal funds rate.
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Always remember that.
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Part b is asking us briefly explain who borrows money and who lends money at this target rate.
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The people who borrow and lend money are banks, basically, one bank bars from another bank.
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These loans are very, very short term.
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But because of the fact that it's called the federal funds rate.
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It's determined by the federal reserve.
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It's determined by the government.
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And it's how they basically do monetary policy is by changing this rate or one of the ways they do it...