Question

Should the Congress regulate the money supply or the Federal Reserve? Why?

Should the Congress regulate the money supply or the Federal Reserve? Why?

Homework Answers

Answer #1

Fed Reserve should regulate the money supply, since this is the central bank of the country. This is the apex body of all banking system; therefore, it has the full power and understanding on money matters. Employees working under this body are specialized in this work. This is the banker of the federal government and gives advice to them how the regulating of money supply can affect the economic growth. Since Federal Reserve controls all banks (those who are directly involved in money making), it is its discretion of regulating money supply too.

Congress doesn’t have such access in country’s money matters (in macro-economic sense); therefore, they should not control money supply.

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