ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The Federal Open Market Committee (FOMC) consists of twelve members–the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis.

Detailed explanation-2: -The Federal Open Market Committee (FOMC) is a committee within the Federal Reserve System (the Fed) that is charged under United States law with overseeing the nation’s open market operations (e.g., the Fed’s buying and selling of United States Treasury securities).

Detailed explanation-3: -The Board of Governors guides the operation of the Federal Reserve System to promote the goals and fulfill the responsibilities given to the Federal Reserve by the Federal Reserve Act. All of the members of the Board serve on the FOMC, which is the body within the Federal Reserve that sets monetary policy.

Detailed explanation-4: -FOMC is the Fed’s primary monetary policy making body because it has the power to raise or lower interest rates. 12 voting members: 7 member Board of Governors, the president of the new york district Fed, 4 district Federal Reserve Bank presidents from the other 11 districts who serve one year rotation terms.

Detailed explanation-5: -Along with the Federal Reserve Board of Governors, the FOMC controls three monetary policy tools: the discount rate, reserve requirements, and open market operations. The Federal Reserve Board of Governors controls the discount rate and reserve requirements, whereas the FOMC controls open market operations.