What is the role of the Federal Reserve System?
It adjusts the interest rates for loans.
It ensures all financial institutions follow banking laws.
It protects up to $250,000 of customer deposits.
It regulates the business practices of stockbrokers.
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The Federal Reserve acts as the U.S. central bank, and in that role performs three primary functions: maintaining an effective, reliable payment system; supervising and regulating bank operations; and establishing monetary policies.
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Option B) It ensures all financial institutions follow banking laws
It ensures all financial institutions follow banking laws is the role of the Federal Reserve System.
- Financial institutions and activities are monitored and regulated. The Federal Reserve monitors the effects on the overall financial system of each financial institution's safety and soundness.
- The American central bank is known as the Federal Reserve System.
- Its primary duties include, among other things, managing the nation's monetary policy and supervising banks.
- Trillions of dollars are sent daily between banks using the Fedwire, a payment system operated by the Federal Reserve.
- The Fed's monetary policy is decided upon by the Federal Open Market Committee, which also controls the nation's money supply.
- Based on its assessment of the economy, the FOMC modifies the target for the overnight federal funds rate, which regulates short-term interest rates.
- The United States' central banking system is known as the Federal Reserve System. It has a significant impact on the nation's banking sector and economy. The governor is in charge of the bank, which also has a board with six additional members. The president proposes these people, and the Senate subsequently confirms them.
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