ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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enforcing the laws created by the reserve banks.
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setting rules for acceptable behavior.
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Either A or B
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None of the above
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Detailed explanation-1: -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-2: -It is responsible for managing monetary policy and regulating the financial system. It does this by setting interest rates, influencing the supply of money in the economy, and, in recent years, making trillions of dollars in asset purchases to boost financial markets.
Detailed explanation-3: -The Federal Reserve was created to manage the money supply of the nation and to prevent economic injuries to the citizens of the U.S. The Fed has powerful tools to affect the supply of money. Read on to learn how it manages the nation’s money supply.
Detailed explanation-4: -It is the Federal Reserve’s actions, as a central bank, to achieve three goals specified by Congress: maximum employment, stable prices, and moderate long-term interest rates in the United States (figure 3.1).