13. Which of the following powers or tools of Federal Reserve monetary policy has the greatest impact on the money supply? a.discount rate b.Regulation Q c.open market operations d.bank examination e.All of the above have about the same impact 14. The asset of Federal Reserve banks associated with open market operations is a.Federal Reserve notes. b.U.S. government securities. c.loans to member banks. d.float. e.None of the above.
Functions of the Federal Reserve System
The Federal Reserve System looks after the financial activities and operations of the banking system. It is the apex body that has complete control over the banking regulations. All the guidelines regarding the banking system, money supply, and formulation of the monetary policy come under the purview of the Federal Reserve System. The New York Fed also helps in drafting the monetary policy and supervising the financial system.
Elastic and Inelastic Markets
Measuring the change in percentage of an economic variable with respect to change in a different economic variable is known as elasticity. This change in percentage results in a change in price concerning changes in other factors. In simple terms, when one factor brings a change to another factor, it is called elasticity.
13. Which of the following powers or tools of Federal Reserve
impact on the money supply?
a.discount rate
b.Regulation Q
c.open market operations
d.bank examination
e.All of the above have about the same impact
14. The asset of Federal Reserve banks associated with open market operations is
a.Federal Reserve notes.
b.U.S. government securities.
c.loans to member banks.
d.float.
e.None of the above.
The Federal Reserve controls the four tools of monetary policy are
(i) open market operations,
(ii) the discount rate,
(iii) reserve requirements.
(iv) Interest on excess reserve
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