The Federal Reserve system is a debt-based financial system because when money comes into existence in the banking system, more debt is created with each dollar as more interest is owed to the banking system which drains wealth from American people, transferring it to the banking system because the amount of debt to be paid back is always larger than the amount of money created when the loan issued.. hundreds of billions of dollars in interest is made off U.S. government debt each year as money that belongs to U.S. taxpayers is transferred to the U.S. government, which in turn is transferred to wealthy international bankers, the IMF, and other foreign governments.the Fed gives interest-free money to the big banks, which in turn lend it back to the U.S.the Federal Reserve bank of New York dominates Wall Street and is used as a tool of global banks that require people to spend their lives paying off debts to that profit the bankers.All of the answers are correct.

Other Options are wrong because 2) This option also wrong 3) Federal financing allows banks to exceed the minimum reserve threshold again. Banks borrow money from the government's central bank using what is called a discount window. 4) Supervision and regulation of financial institutions and activities. The Federal Reserve promotes the security and health of individual financial institutions and monitors their impact on the financial system as a whole. Correct option is A The Federal Reserve generates money through open market operations, that is, by using new money to buy securities in the market or by creating bank reserves to be issued to commercial banks. The bank reserves are then multiplied by the Fractional-Reserve Banking Service, allowing banks to borrow some of their deposits.

Answered: The Federal Reserve system is a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The Federal Reserve system is a debt-based financial system because

when money comes into existence in the banking system, more debt is created with each dollar as more interest is owed to the banking system which drains wealth from American people, transferring it to the banking system because the amount of debt to be paid back is always larger than the amount of money created when the loan issued.
. hundreds of billions of dollars in interest is made off U.S. government debt each year as money that belongs to U.S. taxpayers is transferred to the U.S. government, which in turn is transferred to wealthy international bankers, the IMF, and other foreign governments.
the Fed gives interest-free money to the big banks, which in turn lend it back to the U.S.
the Federal Reserve bank of New York dominates Wall Street and is used as a tool of global banks that require people to spend their lives paying off debts to that profit the bankers.
All of the answers are correct.

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