Question

What is the responsibility of each of the twelve Federal Reserve’s banks in their districts?

Answer 1

The correct answer is: ". they monitor functioning of banks in their through onsite and offsite reviews".

The Federal Reserve is the US Central Bank. Its functions consist on controlling the money supply in order to soften recession periods, to maintain  acceptable levels of inflation (price levels) and to ensure maximum employment figures. In order to implement the abovementioned policies, the Fed has divided the territory of the US into 12 districts, locating on each one of the 12 Federal Reserve’s banks.

One of their main functions consists on gathering data about the functioning of banks and other types of businesses within their district and about what the region might need. These information would be transferred to the Directives and to the monetary policymakers.

Originally, each of these 12 offices established in own discount rates for their offer of financial products, but as TICs entered deeply in the sector it became mandatory that all Federal Reserve’s banks acted uniformily at setting interest rates. Therefore A is not eligible.

A central bank is never involved with fiscal policy, this is why answers C and D are not eligible.

Answer 2

The correct options are

B. they monitor functioning of banks in their through onsite and offsite reviews

D. they write fiscal policies

Explanation:

The Federal Reserve is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system.

Federal Reserve's duties fall into four general areas which are:  

1. conducting the nation's monetary policy;
2. supervising and regulating banking institutions and protecting the credit rights of consumers;
3. maintaining the stability of the financial system; and
4. providing certain financial services to the U.S. government, the  public, financial institutions, and foreign official institutions.