ECONOMICS (CBSE/UGC NET)

ECONOMICS

MONEY

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The federal reserve is responsible for determining how much money should be in circulation.
A
true
B
false
C
Either A or B
D
None of the above
Explanation: 

Detailed explanation-1: -The Fed controls the supply of money by increas-ing or decreasing the monetary base. The monetary base is related to the size of the Fed’s balance sheet; specifically, it is currency in circulation plus the deposit balances that depository institutions hold with the Federal Reserve.

Detailed explanation-2: -Key Takeaways. The Federal Reserve, as America’s central bank, is responsible for controlling the supply of U.S. dollars. The Fed creates money by purchasing securities on the open market and adding the corresponding funds to the bank reserves of commercial banks.

Detailed explanation-3: -The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system.

Detailed explanation-4: -The monetary base is usually measured by the central bank, which controls the circulation of currency in the economy.

There is 1 question to complete.