/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q6. Which of the following is not a ... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 14: Q6. (page 301)

Which of the following is not a function of the Fed?

a. Setting reserve requirements for banks.

b. Advising Congress on fiscal policy.

c. Regulating the supply of money.

d. Serving as a lender of last resort.

Short Answer

Expert verified

The correct answer is option b) Advising Congress on fiscal policy.

Step by step solution

01

Step 1. Functions of Federal Reserve

The major functions of the Fed include issuing currency, setting the reserve requirements, lending to financial institutions at the time of emergency, providing for check collection, supervising banks, and managing the money supply.

02

Step 2. Explanation for the correct answer

The Fed doesn鈥檛 advise Congress on fiscal policies. The fiscal policies refer to the tax and other expenditures of the government. In the US, the federal government and administrative authorities take the decision relating to fiscal policies. The Fed is not involved in the fiscal policy determination.

Since advising Congress is not included in the functions, option (b) is incorrect.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Why are federal prosecutors reluctant to bring major charges against large financial firms? What was the main regulatory action of the Glass-Steagall law? Why might having many smaller financial firms be more stable than having fewer larger firms? What argument can be made for the possibility that larger financial firms might be more stable than smaller financial firms?

James borrows $300,000 for a home from Bank A. Bank A resells the right to collect on that loan to Bank B. Bank B securitizes that loan with hundreds of others and sells the resulting security to a state pension plan, which at the same time purchases an insurance policy from a company called AIG that will pay off if James and the other people whose mortgages are in the security can鈥檛 pay off their mortgage loans. Suppose that James and all the other people can鈥檛 pay off their mortgages. Which financial entity is legally obligated to suffer the loss?

a. Bank A

b. Bank B

c. the state pension plan

d. AIG

What 鈥渂acks鈥� the money supply in the United States? What determines the value (domestic purchasing power) of money? How does the purchasing power of money relate to the price level? In the United States, who is responsible for maintaining money鈥檚 purchasing power?

Recall the formula that states that $V = 1/P, where V is the value of the dollar and P is the price level. If the price level falls from 1 to 0.75, what will happen to the value of the dollar?

a. It will rise by a third (33.3 percent).

b. It will rise by a quarter (25 percent).

c. It will fall by a quarter (鈭�25 percent).

d. It will fall by a third (鈭�33.3 percent).

The three functions of money are:

a. liquidity, store of value, and gifting.

b. medium of exchange, unit of account, and liquidity.

c. liquidity, unit of account, and gifting.

d. medium of exchange, unit of account, and store of value.
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.