ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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controlling the budget
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setting spending levels.
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controlling the money supply.
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loaning out money.
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Detailed explanation-1: -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-2: -The Fed can influence the money supply by modifying reserve requirements, which generally refers to the amount of funds banks must hold against deposits in bank accounts. By lowering the reserve requirements, banks are able to loan more money, which increases the overall supply of money in the economy.
Detailed explanation-3: -A Federal Reserve Open Market Sale decreases the money supply. The Fed engages in open market operations very frequently and with great effect. Open market operations are the primary way that the Fed tries to change the money supply.