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Lear X (355) YouTube servlet/quiz?ctx-amvallad-0044&quiz; action-takeQuiz&quiz; probGuid-QNAPCOA80101 ler web Imported From Firefo The Federal Reserve System Graded Assignment | Read Chapter 15 | Back to Assignment Due Monday 04.16.18 at 1 Attempts: Keep the Highest: 3 3. The Federal Reserve's organization All members of the Federal Reserve Board of Governors vote at Federal Open Market Committee (FOMC) However, onlyof the regional bank presidents are members of the FOMc. Aa Aa fthe fo is a responsibility of the Federal Open Market Committee (FOMC)? O Making decisions regarding monetary policy O Buying and selling stocks O Issuing mortgages to homeowners The Federal Reserve's primary tool for changing the money supply is decrease the number of doilars in the U.S. economy (the money supply), the Federal Reserve will government bonds. In order to us .

Explanation / Answer

The answers are highlighted and underlined:

3. (i) Only 5 (five) of the regional bank presidents are members of the FOMC.

(ii) Responsibility of FOMC – making decisions regarding monetary policy. The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve Board that determines the direction of monetary policy.

(iii) The Federal Reserve's primary tool for changing the money supply is open market operations. In order to decrease the number of dollars in the U.S. economy (the money supply), the Federal Reserve will sell U.S. government bonds.

Explanation:

Open market operations are the Fed's primary tool for controlling the money supply. Open market operations involve buying and selling U.S. government bonds. To increase the money supply, the Fed creates dollars with which to purchase government bonds from the public. After the purchase, the Fed has bonds and the public has new dollars—an increase in the money supply. To reduce the money supply, the Fed sells U.S. government bonds to the public. After the sale, the public has bonds and the Fed has taken dollars out of circulation, thereby reducing the money supply.

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