ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The U.S. central banking system-the Federal Reserve, or the Fed-is the most powerful economic institution in the United States, perhaps the world. Its core responsibilities include setting interest rates, managing the money supply, and regulating financial markets.

Detailed explanation-2: -The Federal Reserve plays a key role in processing small-value electronic credit or debit transfers, such as direct deposits of payroll or recurring bill payments. The Federal Reserve Board issues paper currency (Federal Reserve notes).

Detailed explanation-3: -The Federal Reserve is responsible for supervising–monitoring, inspecting, and examining–certain financial institutions to ensure that they comply with rules and regulations, and that they operate in a safe and sound manner.

Detailed explanation-4: -The Federal Reserve Banks provide financial services to depository institutions including banks and credit unions, much like those that banks provide for their customers. These services include collecting checks, electronically transferring funds, and distributing and receiving cash and coin.