There are (5/7/12) members of the Fed Reserve Board of Governors.

Question

Question:

There are (5/7/12) members of the Fed Reserve Board of Governors.

Which of the following contributes to making the Federal Reserve an independent policymaking body?

  • There are 12 Federal Reserve banks.
  • Members of the Board of Governors are appointed for 14-year terms.
  • Its role is written into the U.S. Constitution.

The Federal Reserve’s primary tool for changing the money supply is the (discount rate / open market operation/ reserve requirement). In order to increase the number of dollars in the U.S. economy (the money supply), the Federal Reserve will (buy/sell) government bonds.

Answer and Explanation:

Open market tasks:

The central bank purchases the administration protections in the open market to such an extent that it brings about an expansion in the cash supply which diminishes the pace of enthusiasm for such a way, that the venture expands that reason the total interest bend shifts rightward that builds both value level and yield in an economy.

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There are seven individuals from the central bank leading group of governors.

The individuals from the leading body of governors are designated for 14-year terms adds to making the central bank a free policymaking body.

The central bank essential device for the adjustment in cash supply in the open market activities with the end goal that as the central bank purchases the administration protections in the open market then the cash supply increments and as the central bank sells the administration protections in the open market then the cash supply diminishes.

So as to build the quantity of dollars in the US economy or cash supply, the central bank will purchase the administration securities with the end goal that the cash supply expands that diminishes the financing cost and it causes the higher interest in an economy. It causes the total interest bend shifts rightward which builds both value level and yield.

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Sam Professor 2 months 1 Answer 78 views 0

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