Question

Classify each statement about the Federal Reserve System as either true or false.

Answer 1

Answer:

b. The Federal Reserve was established by the U.S. Constitution in the late 1700s. FALSE.

There is no mention of the Federal Reserve or an institution like it in the Constitution which is why establishing a national bank faced so much opposition for years until the Federal Reserve Structure was put in place.

c. The national objectives of the Federal Reserve include promoting economic growth, full employment, stable prices, and moderate interest rates. TRUE

The Fed aims to improve the economy of the United States by bringing about growth, full employment and stable prices as well as moderate interest rates.

d. All Federal Reserve actions are subject to veto by the executive branch. FALSE.

The FED is independent of the Executive branch which means that it is not subject to vetos from it. They do however work together to ensure economic stability.

e. The Federal Reserve determines monetary policy in the United States. TRUE.

As the central banking system of the United States, the Fed determines the monetary policy of the U.S.

f. The Federal Reserve was created by the Federal Reserve Act of 1913. TRUE.

The Federal Reserve was created by an Act of Congress called the Federal Reserve Act in 1913 whereupon it was signed into law by President Woodrow Wilson.