Question

Which statement below about the Federal Reserve is false? It loans money to private banks. It...

Which statement below about the Federal Reserve is false?

  • It loans money to private banks.

  • It is subdivided into 12 regional banks.

  • It is the sole monetary authority in the U.S.

  • The president is the head of the Federal Reserve.

  • The president appoints members of the Board of Governors.

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Answer #1

The Federal Reserve acts as the lender of last resort and the banker of the banks. It lends to private banks. Statement 1 is true.

The Federal Reserve is further subdivided into 12 regional banks. Statement 2 is true.

The Federal Reserve is the sole authority in controlling the monetary sphere in the U.S. Statement 3 is true.

The Federal Reserve is headed by the head of the Board of Governors who are nominated by the President. Statement 4 is false and Statement 5 is true.

Ans: The president is the head of the Federal Reserve.

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