Explanation The Federal Reserve System is the central bank of Country U’s economy. It is the vested power to take actions in the economy in order to control and regulate the money supply in the economy and also to avoid the chance for the economic fluctuation in Country U’s economy. The controlling of the money supply is done through the adjustments in the rate of interest in the economy and through the Federal Open Market Committee, which sells and buys the government securities to control the money supply. Option (c): The Federal Open Market Committee is the committee that deals with the sale and purchase of the government securities such as the government bonds and equities in the market for regulating and controlling the money supply and interest rate in the economy. This means that FOMC is an important part of the FED. Hence, option 'c' is the correct answer. Option (a): The Federal Deposit Insurance Corporation is the agency that provides the insurance coverage to the depositors in Country U’s economy for their deposits in the commercial banks of Country U’s economy...

FED decision making body to sale and purchase of government securities.

Economics For Today

10th Edition

ISBN: 9781337613040

Author: Tucker

Publisher: Cengage Learning

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Question

Chapter 24, Problem 13SQ

To determine

FED decision making body to sale and purchase of government securities.

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Similar questions

List the three traditional tools that a central bank has for controlling the money supply.
If the central bank sells 500 in bonds to a bank that has issued 10,000 in loans and is exactly meeting the reserve requirement of 10, what will happen to the amount of loans and to the money supply in general?

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