ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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to bring more stability to the banking system after the Panic of 1907
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to have a place for banks to deposit their excess deposits during World War I
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to make sure that the U.S. banks were obeying laws regarding banking after the Civil Rights Act
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to keep the banking power of the United States spread out among various districts after the Civil War
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Detailed explanation-1: -What led to the creation of the Federal Reserve? A particularly severe panic in 1907 resulted in bank runs that wreaked havoc on the fragile banking system and ultimately led Congress in 1913 to write the Federal Reserve Act. The Federal Reserve System was initially created to address these banking panics.
Detailed explanation-2: -The Federal Reserve System, often referred to as the Federal Reserve or simply “the Fed, ” is the central bank of the United States. It was created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system.
Detailed explanation-3: -1 The Federal Reserve System created the dual mandate to maximize employment and keep inflation low. The Federal Reserve was thus given power over the money supply and, by extension, the economy.
Detailed explanation-4: -The Panic of 1907 gave impetus to plans to impose more government oversight and public responsibility to bail out financial markets, leading to the creation of the Federal Reserve System a few years later.
Detailed explanation-5: -The Federal Reserve monitors risks to the financial system and works, usually with agencies at home and abroad, to help ensure the system supports a healthy economy for U.S. households, communities, and businesses.