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1.04 Role of Federal Reserve

The Federal Reserve System is the central bank of the United States. It is composed of a central authority called the Board of Governors located in Washington D.C. and a decentralized network of 12 Federal Reserve Banks located throughout the country. The Fed regulates financial institutions, manages the money supply, and influences the economy through actions like raising and lowering interest rates. Its main responsibilities include conducting monetary policy, supervising banks, maintaining financial stability, and providing banking services for the U.S. government and financial institutions.

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564 views2 pages

1.04 Role of Federal Reserve

The Federal Reserve System is the central bank of the United States. It is composed of a central authority called the Board of Governors located in Washington D.C. and a decentralized network of 12 Federal Reserve Banks located throughout the country. The Fed regulates financial institutions, manages the money supply, and influences the economy through actions like raising and lowering interest rates. Its main responsibilities include conducting monetary policy, supervising banks, maintaining financial stability, and providing banking services for the U.S. government and financial institutions.

Uploaded by

FUD Apple
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1.

04 Role of Federal Reserve

Directions: Watch the Video “What gives a dollar bill its value” by Doug Levinson

The value of money is determined by how much (or how little) of it is in circulation. But who
makes that decision, and how does their choice affect the economy at large? Doug Levinson
takes a trip into the United States Federal Reserve, examining how the people who work there
aim to balance the value of the dollar to prevent inflation or deflation.

1. In a democracy, does it make sense to have decisions about monetary policy made by
people who are not elected? Why or why not?
No, because they would want the bill value to raise
2. Should the government encourage people to own their own homes, even if they have to
go into debt to do that?
No, because several bills have to be paid and power needs to be aquired
3. What is your opinion about the long-term health of the U.S. economy, and why do you
have that opinion?

It changes a lot and a little which impacts everyone


4. What is United States currency linked to?
Gold
5. Which branch of government decides how much money will be in circulation in our
economy?
The US federal reserve
6. If the total amount of currency circulating increases faster than the total value of goods
and services in the economy that is referred to as:

a. Inflation
b. Deflation

c. Bankruptcy
d. Wealth transfer

7. One effect of deflation is:


Reduced prices and value
8. Where do profits from the Federal Reserve System go?
a. There are no profits
b. To the U.S. Treasury
c. To Regional Federal Reserve Banks
d. To commercial banks that participate in the Federal Reserve System

One of the more mysterious areas of the economy is the role of the Fed. Formally known as the
Federal Reserve, the Fed is the gatekeeper of the U.S. economy. It is the central bank of the
United States -- it is the bank of banks and the bank of the U.S. Government. The Fed regulates
financial institutions, manages the nation's money and influences the economy. By raising and
lowering interest rates, creating money and using a few other tricks, the Fed can either stimulate
or slow down the economy. This manipulation helps maintain low inflation, high employment
rates, and manufacturing output.

Based in Washington, D.C., the Fed is the bank of the U.S. government and regulates the
nation's financial institutions. It's comprised of a network of 12 Federal Reserve Banks and a
number of branches. This is all overseen by the Fed's Board of Governors.

9. Who owns the Federal Reserve?


United states
10. How is the Federal Reserve System structured?
a central authority called the Board of Governors located in Washington, D.C., and a
decentralized network of 12 Federal Reserve Banks located throughout the U.S.
11. What are the responsibilities/functions of the Federal Reserve System?
The Fed's main duties include conducting national monetary policy, supervising and
regulating banks, maintaining financial stability, and providing banking services.
12. Does the Federal Reserve operate using tax dollars?
Yes
13. Does the Federal Reserve pay taxes?
Only for real estate
14. Who audits the Federal Reserve and how often?
audited annually by an independent public accounting firm retained by the Board of
Governors
15. Where is the Federal Reserve Branch in North Carolina located?
Charlotte

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