Chapter 26, Problem 1FRQ

a)

To determine

The name of the group that determines the monetary policy.

Explanation of Solution

The Federal Open Market Committee (FOMC) is a division of the Federal Reserve System (FRS) that manages open market transactions to decide the course of monetary policy throughout the United States (OMOs).

b)

To determine

How many members serve in FOMC.

Explanation of Solution

The council is made up of the five presidents of the Federal Reserve Banks and the seven representatives of the Board of Governors.

c)

To determine

Permanent members of the committee.

Explanation of Solution

Board of Governors members as well as the Federal reserve bank president of Newyork are the permanent members of this committee.

d)

To determine

Temporary members of the committee.

Explanation of Solution

Among the other 11 Federal Reserve Bank Presidents, 4 work in the committee on a rotating basis.