Chapter 15, Problem 8AA

To determine

To evaluate: The functions of the board of governors in the Fed.

Explanation of Solution

The Board of Governors directs the operation of the Federal Reserve System to advance the aims and meet the Federal Reserve Act’s obligations.

The Board supervises the functions of the 12 Reserve Banks and shares with them the responsibility to track and regulate other financial institutions and activities. The Board also offers general guidance , direction and supervision when the Reserve Banks lend to depository institutions and others, and when the Reserve Banks offer financial services to depository institutions and the federal government; the Board also holds strong supervisory responsibility for the operations and activities of the Federal Reserve Banks.

Economics Concept Introduction

Introduction: The Federal Reserve System (FRS) is the United State’s central bank, and perhaps the world's most influential financial institution. It was developed to provide a free, scalable, and stable monetary and financial framework for the nation. The FRS consists of twelve regional Federal Reserve Banks each in charge of a different geographic area of the United States. Sometimes the agency is generally known as the Fed.