If the world experienced a global depression accompanied by stable prices and countries’ central banks followed strict policy rules to limit inflation then the banks are likely to substantially increase the global supply of money in response to the depression depreciate the nations’ currency values increase bank reserve requirements to promote safety and stability None of the above
Functions of the Federal Reserve System
The Federal Reserve System looks after the financial activities and operations of the banking system. It is the apex body that has complete control over the banking regulations. All the guidelines regarding the banking system, money supply, and formulation of the monetary policy come under the purview of the Federal Reserve System. The New York Fed also helps in drafting the monetary policy and supervising the financial system.
Elastic and Inelastic Markets
Measuring the change in percentage of an economic variable with respect to change in a different economic variable is known as elasticity. This change in percentage results in a change in price concerning changes in other factors. In simple terms, when one factor brings a change to another factor, it is called elasticity.
If the world experienced a global depression accompanied by stable prices and countries’ central banks followed strict policy rules to limit inflation then the banks are likely to
- substantially increase the global supply of money in response to the depression
depreciate the nations’ currency values
-
increase bank reserve requirements to promote safety and stability
-
None of the above
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