Chapter 26, Problem 2FRQ

a)

To determine

Function of the Board of Governors of the Federal Reserve System

Explanation of Solution

The Board of Governors' main responsibility is to direct the Federal Reserve Service's operations in order to advance its objectives and carry out the duties assigned to it by the Federal Reserve Act.

b)

To determine

Number of members in Federal reserve group.

Explanation of Solution

The Board is made up of seven individuals, or "governors."

c)

To determine

The Appointing authority of the group.

Explanation of Solution

The members are appointed by the President of the country U and are approved by the Senate of the nation.

d)

To determine

Tenure of members.

Explanation of Solution

Representatives of the Federal Reserve Board are elected to a complete 14-year term; however, if a member resigns from the position before the conclusion of that period, the individual proposed and approved to fill the gap may later be assigned to a complete 14-year term.

e)

To determine

Reason behind the tenure of members.

Explanation of Solution

The Federal Reserve System as a complete, as well as the Board, is meant to be shielded from any potential daily political influences as a result of the Board's extended tenure as well as staggered selections.

f)

To determine

Tenure of the chair in the board.

Explanation of Solution

The tenure of the chair is 4 years.