Which of These is a Banking Activity of the Fed?
The banking activity of the Fed is Storing Money for Banks, which involves managing the money supply, ensuring economic stability, and influencing interest rates and monetary policies.
by Sai V
Updated Oct 27, 2023
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Which of These is a Banking Activity of the Fed?
A) Printing Money
B) Regulating Securities Markets
C) Storing Money for Banks
D) Funding Government Programs
The correct answer is C) Storing Money for Banks.
This is a banking activity of the Federal Reserve (Fed) because it manages the money supply of the economy. By storing money for banks, the Fed ensures stability and control over the monetary system. This practice helps in regulating the amount of money in circulation, preventing inflation, and maintaining economic balance. Storing money for banks also allows the Fed to influence interest rates and implement monetary policies effectively, thereby playing a crucial role in the nation's financial stability and growth.
What is the Federal Reserve?
The Federal Reserve, or the Fed, is the central bank of the United States, responsible for regulating the country's monetary policy, interest rates, and financial stability. It comprises the Board of Governors and 12 regional Reserve Banks, playing a crucial role in the nation's economic stability.
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