Which is a reason for why private banks tend not to use the discount window?

Macroeconomics
13th Edition
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter13: The Federal Reserve System
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Which is a reason for why private banks tend not to use the discount window?
The discount rate is typically lower than the federal funds rate.
The discount rate is typically higher than the federal funds rate.
Banks always have plenty of excess reserves, so they don't need to borrow.
The discount window can cause a liquidity trap.
Quantitative easing ensures deflation.
Transcribed Image Text:Which is a reason for why private banks tend not to use the discount window? The discount rate is typically lower than the federal funds rate. The discount rate is typically higher than the federal funds rate. Banks always have plenty of excess reserves, so they don't need to borrow. The discount window can cause a liquidity trap. Quantitative easing ensures deflation.
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