Howevi discounting at the Federal Reserve is reserved f emergency needs, such as an unexpected increa in the public's desire for cash or an unexpedi adverse clearance (when more money flows fra the specific bank into others than flows fra others to it). Thus, despite the low level of ti U. S. discount rate relative to other interest rate bank borrowing is not motivated or deter changes in the discount rate.
There are large flows which are infrequent, very small flows which are also infrequent, and mod-?rate flows which are common. Most streams are full almost to the top of their banks a few :imes each year, and on an average they overflow :he banks once every year. Fig. 4 illustrates the 'requencies of discharges of various magnitudes :or the Powder River at Arvada in Wyoming.
GRESHAM'S LAW, gresh'amz, in economics, is usually stated as "bad money drives out good." The law stems from the fact that money has a value both as money and as a commodity in the open market. The former value is set arbitrarily by law and is relatively fixed; the latter is determined by supply and demand and varies from time to time, "Good money" has a higher value as a commodity than as money and will disappear from circulation.
Howevi discounting at the Federal Reserve is reserved f emergency needs, such as an unexpected increa in the public's desire for cash or an unexpedi adverse clearance (when more money flows fra the specific bank into others than flows fra others to it). Thus, despite the low level of ti U. S. discount rate relative to other interest rate bank borrowing is not motivated or deter changes in the discount rate.