Respuesta :
If the fed ultimately wants to lower interest rates in the economy, then it should be lower the discount rate.
The discount rate is also known as the bank rate. It is the rate of interest at which central bank Charges on its loan and advance to the commercial bank . If fed wants to decrease the interest rate , then it should lower the discount rate. If the discount rate decrease then the commercial bank can also lend at lower interest rate in economy .
In business finance, discount rate is the rate of return used to discount future cash flows to their present value. This rate is often the weighted average cost of capital (WACC), the required rate of return, or the minimum rate of return an investor expects for the risk of an investment.
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