Question

1. The responsibilities of the U.S. Federal Reserve System include O overseeing the banking system and regulating the quantity of money in the economy setting the lovel of real interest rates working with Congress to devise a financial plan for the country and execute the President's orders O O calculating and reporting the unemployment rate 2. To increase the supply of money when the economy is weak, the Fed closes banks O reduces inflation O sells bonds O buys bonds 3. The federal funds rate is the short-term interest rate that O banks charge their best customers when borrowing banks earn on savings accounts with the Fed O banks charge each other when borrowing or lending to each other the Fed charges banks when borrowing

Answer 1

Solution 1

The computation and reporting pertaining to unemployment rate is the responsibility of the bureau of the labour statistics, therefore option “d” is also incorrect.

The U.S. department associated with treasury work in close proximity with congress for formulating the financial plan and execution of order of the president. Therefore option ”c” is also incorrect.

Real rate of interest stands to be the interest rate which is received by the lender, saver or investor after taking into consideration the inflation factor. The real interest rate is set after the adjustment is made by the economy with respect to the policy made by central bank. Thus it does not stand to be responsibility of Federal Reserve System, therefore option “b” is incorrect.

The Federal Reserve System takes into consideration promotion of the soundness and safety associated with the individual institution dealing in finance and monitors their effect underlying financial system. Thus they stand responsible for supervision and regulation of the institutions dealing in finance and their related activities.

Hence, the correct option is “a”