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The Federal Reserve uses tools like open market operations, reserve requirements, and the discount rate to regulate the nation's money supply.

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AnswerBot

5mo ago

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What is the federal reserve best known for?

For regulating the nations money supply


If the federal reserve increases the reserve requirement what effect will this have on the nations money supply?

If the Federal Reserve increases the reserve requirement, banks must hold a larger percentage of their deposits as reserves and can lend out less money. This reduction in lending capacity typically leads to a decrease in the overall money supply in the economy. Consequently, it can result in tighter credit conditions, potentially slowing economic growth and increasing interest rates.


Who controls the value of the dollar?

The ones who controls how many of the dollars are in circulation. "Give me control of a nations currency, and i care not who makes the laws" or something like that, is a famous quote from one of them folks from The Federal Reserve


What happens to reserves and monetary base if the Fed buy bonds from a bank?

If the Federal reserve wants to create dollars it buys bonds from the public in the nations bond market. After the purchase the money spent is in the fists of the public. So basically the purchase of bonds by the Fed creates money, thus increasing the money supply. If the Fed sells government bonds the money then is out of the hands of the public thus decreasing the money supply. Reserves are unaffected because managing the minimum reserve for banks is a different tool that the Federal Reserve and the Federal Open Market Committee use to help manipulate the money supply and the value of that supply of money. It is called fractional reserve banking. For more information I would recommend checking out the FOMC website, Central Bank website, and Federal reserve website.


What financial institution is considered a lender of last resort?

In the United States, the Federal Bank of New York is considered to be the lender of last resort. In world economics several international financial organizations are lenders to nations in dire economic straits.

Related Questions

What is the central nations banking system?

Federal Reserve


What is the federal reserve best known for?

For regulating the nations money supply


What was the nations first true a central bank?

The nation's first true central bank was The Federal Reserve.


Is responsible for managing the supply of money as well as regulating the nations banks and other financial institutions?

Federal Reserve


What did the Wilson administration establish in an effort to assert government control over the nations banking system?

created the federal reserve system


What four functions does the federal reserve performs?

The Federal Reserve controls the nations supply of money and regulates banks. It also makes sure the financial system remains stable and provides financial service to depository, U.S. government, and foreign official institutions.


What are the federal power?

declare war maintain army and navy coin money regulate trade between states and with foreign nations


In an effort to assert government control over the nations banking sytem Wilson and progressive members of congress?

created the federal reserve system


How did president Wilson and congress assert government control over the nations banking system?

They founded what is now called the Federal Reserve system.


What did the federal government do to regulate big business?

Article 1 Clause 3 is known as the commerce clause, it says congress shall have the power to "regulate commerce with foreign nations among other states.


In an effort to assert government control over the nations banking system, wilson and progressive members of congress?

created the federal reserve system -AKG<3


If the federal reserve increases the reserve requirement what effect will this have on the nations money supply?

If the Federal Reserve increases the reserve requirement, banks must hold a larger percentage of their deposits as reserves and can lend out less money. This reduction in lending capacity typically leads to a decrease in the overall money supply in the economy. Consequently, it can result in tighter credit conditions, potentially slowing economic growth and increasing interest rates.