When you or I write a check there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money.-Putting It Simply, Federal Reserve Bank of Boston, 1984This quotation refers to the Federal Reserves role in which of the following?

FISCAL POLICY

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

“When you or I write a check there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money.”-Putting It Simply, Federal Reserve Bank of Boston, 1984This quotation refers to the Federal Reserve’s role in which of the following?

A	balancing the federal budget
B	increasing the money supply
C	manufacturing coins and bills
D	combating hyperinflation

Explanation:

Detailed explanation-1: -Most checks are collected and settled within one business day.

Detailed explanation-2: -The Federal Reserve Banks offer item processing, settlement and adjustments services to help manage your check clearing needs. Forward items, including commercial checks, Treasury checks, and Postal Money Orders, can be deposited in a single cash letter. Paper savings bonds must be deposited in a separate cash letter.

Detailed explanation-3: -The Federal Reserve Clearinghouse runs the check clearing system in the United States.

Detailed explanation-4: -Monetary policy in the United States comprises the Federal Reserve’s actions and communications to promote maximum employment, stable prices, and moderate long-term interest rates–the economic goals the Congress has instructed the Federal Reserve to pursue.

There is 1 question to complete.

ECONOMICS (CBSE/UGC NET)

ECONOMICS

FISCAL POLICY