Question

why is currency held by the u.s. treasury, the federal reserve banks, commercial banks, and thrift institutions excluded from m1 and other measures of the money supply?

Answer 1

The u.s. treasury, the federal reserve banks, commercial banks, and thrift institutions excluded According to the question, the "federal reserve system" is the organisation in charge of controlling the nation's money supply.

The central banking system of the United States of America is said to have a variety of duties to carry out. The main duties include keeping an eye on financial institutions, controlling the amount of money in the economy, acting as the government of the United States' fiscal agent, etc. As a result, its main goal is to ensure the financial and monetary systems are secure, flexible, and stable.A commercial bank purchases a Treasury bond from the Federal Reserve for $100,000. the amount of money available could rise by $100,000.The Federal Reserve buys and sells government assets to control interest rates and the availability of money. This activity is classified as open market activities.

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