Answer(1)
b. interest rate at which banks can borrow reserves from the Federal Reserve
Explanation:
The discount rate is known in America as the rate of interest which a central bank charges on its loans and advances to a commercial bank. This loans and advances are from the federal reserve.
Answer (2)
a. more reserves, causing an increase in lending and the money supply
Explanation:
Excess lending from the national reserve due to a lowered discount rate will lead to a reserve supply excess into commercial banks throughout the economy and expands the money supply .