ECONOMICS (CBSE/UGC NET)

ECONOMICS

MONEY

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which of the following as a role of the Fed? Check all the correct answers.
A
Regulate Hedge Funds
B
Act as a lender of last resort
C
Manage the US monetary policy
D
Determine the income tax rate
E
Act as the central banks for states
Explanation: 

Detailed explanation-1: -The U.S. central banking system-the Federal Reserve, or the Fed-is the most powerful economic institution in the United States, perhaps the world. Its core responsibilities include setting interest rates, managing the money supply, and regulating financial markets.

Detailed explanation-2: -The Fed’s main duties include conducting national monetary policy, supervising and regulating banks, maintaining financial stability, and providing banking services.

Detailed explanation-3: -The Federal Reserve conducts the nation’s monetary policy by managing the level of short-term interest rates and influencing the availability and cost of credit in the economy. Monetary policy directly affects interest rates; it indirectly affects stock prices, wealth, and currency exchange rates.

Detailed explanation-4: -The Federal Reserve Board issues paper currency (Federal Reserve notes). Federal Reserve Banks ensure adequate supply of paper currency around the country. Federal Reserve Banks collect checks deposited by banks and return unpaid checks to the bank on which the check is drawn.

There is 1 question to complete.