Chapter 17, Problem 2AA

To determine

To ascertain the term that best completes the sentence, “The Fed can set a ________ rate of growth for money supply.”

Explanation of Solution

The Fed can set a targetrate of growth for money supply.

Repetitive financial panics that struck the U.S. economy over the preceding century caused its development, leading to significant economic disturbances due to banking crises and company bankruptcies. A 1907 crisis led to demands for an organization that would stop panics and disturbances.Simply referred to as the Fed, it has large powers to take steps to see that the system is financially secure. It is also the principal operator of the financial entities in the nation. Banks also turn to the Fed as a last resort where they can borrow money when nobody else wants to go.

Economics Concept Introduction

Introduction: The Federal Reserve System (FRS), also simply called "the Fed," is the United States' central bank and perhaps the world's most influential financial institution. It was established to provide a free, efficient, and balanced financial and monetary system for the nation.