Which best describes a centrals bank primary role

History

2 answers:

Scrat [10]4 years ago

8 0

The primary role of a central bank is creating monetary policy.

The three major functions of the central bank (Fed) of the United States are monetary policy, financial services and controlling affairs of other member banks (banks supervision)

<h2>Further Explanation</h2>

The Federal Reserve System is the central bank of the United States and it is also known as the Fed. The Federal Reserve System plays a major role in the Economy of the United States and the world. The US central bank is a single actor in the US economy and also controls the world’s money.

The Federal Reserve System is made of three major component and these include:

The board of governors
The staff economists
The Federal open market committee

The board of governors is made of seven governors and their primary duty is to guide monetary policy action and analyze both domestic and international condition.

The staff economists provides semi –annual and beige brook monthly reports to the congress

The federal open market committee sets target for fed fund rate and controls the market operation.

Other functions of the Federal Reserve System include

Manages inflation
Controls other member banks
Ensures the financial system is stable

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Which best describes a central bank's primary role? brainly.com/question/12587095
Which best describes a central bank's primary role? brainly.com/question/12984301

KEYWORDS:

central bank
federal reserve system
inflation
board of governors
staff economists
monetary policy

Rina8888 [55]4 years ago

5 0

<u>The main role of the central bank is to create monetary policy. </u>

Further Explanation:

Central bank:

The central bank is a public entity that has authority over the production and distribution of money in a specific country. The formation of the monetary policy is an emerging function of the central bank. The central bank helps in straightening the economic condition of the country by easing or tightening the supply of money.

The primary role of the central bank:

The primary role of the central bank is to create a monetary policy. The central bank is liable for the liquidity in the financial system of the county. The central bank has three monetary tools.

Reserve requirement: It is the amount of cash that should be held by each commercial bank.

Open market operations: The central bank buys and sells securities with commercial banks.

Setting the interest rate: The central bank sets the interest rate that they charge from the commercial banks. The interest rate directly affects the dollar value.

Thus, the main role of the central bank is to create monetary policy.

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