There are 12 members of the Federal Reserve Board of Governors. Which of the following contributes to making the Federal Reserve an independent policymaking body?

Question

Question:

There are 12 members of the Federal Reserve Board of Governors. Which of the following contributes to making the Federal Reserve an independent policymaking body?

(a) There are 12 different Federal Reserve banks.

(b) Members of the Board of Governors are appointed for 14-year terms.

(c) Its role is written into the U.S. Constitution.

The Federal Reserve’s primary tool for changing the money supply is _____. In order to increase the number of dollars in the U.S. economy (the money supply), the Federal Reserve will _____U.S. government bonds.

Answer and Explanation:

Cash supply:
It is the aggregate sum of cash available for use in an economy. What measure of cash would be available for use is chosen by the Federal Reserve.

Explanation:
choice B is right.
There are 12 individuals from leading body of governors and the board comprises of 7 individuals who are affirmed by the president and affirmed by the senate. The individuals from the leading group of senators are named for 14-year term. In this way, contributing a free policymaking body.
The essential wellspring of changing the cash supply is OPEN MARKET OPERATIONS (OMO).
The Fed takes part in OMO where is purchases and sells protections in th market to control the inventory of cash.

Purchase Bonds.
At the point when the Fed purchases securities, it pays money consequently to general society, and accordingly the inventory of cash in the economy increments.
Actually, when it sells the securities, it receives money consequently, and the cash in the hands of the open lessens and the inventory of cash diminishes.

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Sam Professor 2 months 1 Answer 100 views 0

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