Which statement is true?

A) The prime rate moves in the opposite direction from changes in the discount rate.
B) The Fed raised the Federal funds target rate and the discount rate from 1989 to mid-1992 to counter the slowdown in the economy.
C) The Federal funds target rate,the discount rate,and the prime rate generally rise and fall together.
D) The discount rate is generally 2% above the prime rate.

The Federal funds target rate, the discount rate, and the prime rate generally rise and fall together. This means that if one rate increases, the others are likely to increase as well, and if one rate decreases, the others are likely to decrease as well. Option A is incorrect because the prime rate and the discount rate tend to move in the same direction as they are both set by banks. Option B is incorrect because the Fed raised the rates to combat inflation, not to counter a slowdown. Option D is incorrect because the discount rate is typically set lower than the prime rate.