ECONOMICS
MONETARY POLICY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
District Banks
|
|
|
Federal Open Market Committee
|
|
|
Board of Governors
|
|
|
Fiscal Policy
|
Detailed explanation-1: -The correct answer is Interest Rate. Interest Rate does not form part of the fiscal policy of a country. Fiscal policy is the use of government revenue collection (mainly taxes but also non-tax revenues such as divestment, loans) and expenditure (spending) to influence the economy.
Detailed explanation-2: -About the FOMC The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy. The Federal Reserve controls the three tools of monetary policy–open market operations, the discount rate, and reserve requirements.
Detailed explanation-3: -The correct option is C) deposit insurance The Federal Reserve Bank uses various policies to control the money supply. It influences the money supply through open market operations, changing required reserve ratios, discount rates, etc.
Detailed explanation-4: -Which of the following is NOT one of the Fed’s monetary policy tools? The answer is c) changing the coupon rate. The discount rate, the required reserve ratio is determined by the Fed and the open market operation is also conducted by FED.