Question

The Federal Reserve Bank is the central bank of the United States that performs several functions:...

The Federal Reserve Bank is the central bank of the United States that performs several functions:

a Accepts deposits from citizens
b Controls the money supply
c Acts as a banker for the states
d All of the above

The average number of times each dollar is spent on final goods and services in a year.

a Equation of Exchange
b Quantity Theory of Money
c Federal Funds Rate
d Velocity of Money

What are the tools of monetary policy?

a Reserve Requirements
b Discount Rate
c Open Market Operations
d All of the above
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Homework Answers

Answer #1

1. The Federal Reserve Bank is the central bank of the United States that performs several functions controls the money supply

Ans is b) Controls the money supply.

Explanation:

As Federal Reserve bank is a central bank it does not accept deposit from citizen not it act as banker for states. But it has the responsibility to control money supply.

2. Velocity of money is the average number of times each dollar is spent on final goods and services in a year.

Ans is d) Velocity of money

Explanation:

According to the definition of Velocity of money.

3. There are mainly three tools of monetary policy:

1. Open Market Operations

2. Reserve Requirements and
3. Discount Rate

So, Ans is d) All of the above.

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