Which statement accurately explains the functions of the Federal Reserve district banks and those for the Board of Governors.(1 point)ResponsesThe Federal Reserve district banks set the target federal funds rate and oversee open market operations while the Board of Governors direct monetary policy and set reserve requirements on banks.The Federal Reserve district banks set the target federal funds rate and oversee open market operations while the Board of Governors direct monetary policy and set reserve requirements on banks.The Board of Governors set the target federal funds rate and overlook the banking industry while the Federal Reserve district banks implement the policies from the Board of Governors.The Board of Governors set the target federal funds rate and overlook the banking industry while the Federal Reserve district banks implement the policies from the Board of Governors.The Board of Governors set the discount rate and reserve requirements on banks while the Federal Reserve district banks overlook the banking industry and implement the policies from the Board of Governors.The Board of Governors set the discount rate and reserve requirements on banks while the Federal Reserve district banks overlook the banking industry and implement the policies from the Board of Governors.The Federal Reserve district banks direct monetary policy and overlook the banking industry while the Board of Governors implement the policies from the district banks.
The statement that accurately explains the functions of the Federal Reserve district banks and those for the Board of Governors is:
"The Federal Reserve district banks set the target federal funds rate and oversee open market operations while the Board of Governors direct monetary policy and set reserve requirements on banks."
The statement that accurately explains the functions of the Federal Reserve district banks and the Board of Governors is:
The Federal Reserve district banks set the target federal funds rate and oversee open market operations, while the Board of Governors direct monetary policy and set reserve requirements on banks.
The correct statement is: The Federal Reserve district banks set the target federal funds rate and oversee open market operations while the Board of Governors direct monetary policy and set reserve requirements on banks.
To understand this, we need to know about the functions of the Federal Reserve district banks and the Board of Governors.
The Federal Reserve System is the central banking system of the United States. It consists of twelve regional Federal Reserve Banks, also known as Federal Reserve district banks, and the Board of Governors, which is located in Washington, D.C.
The functions of the Federal Reserve district banks include:
1. Setting the target federal funds rate: The federal funds rate is the interest rate at which banks lend to each other overnight. The Federal Reserve district banks, through the Federal Open Market Committee (FOMC), set a target for this rate, which influences short-term interest rates in the economy.
2. Overseeing open market operations: Open market operations involve the buying and selling of government securities (such as Treasury bonds) by the Federal Reserve in the open market. The Federal Reserve district banks execute these operations to influence the availability of money and credit in the economy.
On the other hand, the functions of the Board of Governors include:
1. Directing monetary policy: The Board of Governors, along with the Federal Reserve district banks, is responsible for formulating and implementing monetary policy in the United States. They make decisions about interest rates, money supply, and credit conditions to promote price stability and economic growth.
2. Setting reserve requirements on banks: Reserve requirements are the amount of funds that banks are required to hold in reserve against their deposits. The Board of Governors sets these requirements to regulate the amount of money banks can lend and to maintain financial stability.
Therefore, the accurate statement is that the Federal Reserve district banks set the target federal funds rate and oversee open market operations, while the Board of Governors direct monetary policy and set reserve requirements on banks.