Question

The Federal Reserve's organization
There are ............... members of the Federal Reserve Board of Governors.
Which of the following is a responsibility of the Federal Open Market Committee (FOMc)?
a. Buying and selling stocks
b. Making decisions regarding monetary policy
c. Issuing mortgages to homeowners
The Federal Reserve's primary tool for changing the money supply is ...................In order to decrease the number of dollars in the U.S. economy (the money supply), the Federal Reserve will ............... government bonds.

Answer 1

Answer:

b. Making decisions regarding monetary policy

Explanation:

The answers for the blank space are in bold.

There are 7 members of FOMc board. They decide which policy interest rate should be by consider the current economic growth from GDP and unemployment. Then, they vote for the desired rate.

The mechanism on managing the rate in the market is changing money supply in the market by using open market operation. they will sell the United State treasury securities to increase the money supply, and do otherwise to increase it.