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.
Why is it important to have the Chairperson of the Federal Reserve System be totally independent from the Executive Branch?
The Federal Reserve is an important and premier financial institution that regulates all other financial institutions of a nation. All type of financial responsibility related to monetary policy of a nation is taken by the federal reserves.
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