With respect to reserve requirements on bank deposits, the Board of Governors can set them
A) at any level the Board desires.
B) at any level approved by the Federal Open Market Committee.
C) within the bounds of the specific limits imposed by Congress.
D) within the bounds of the specific limits set by the Secretary of the Treasury.

Question

Quizplus · Accepted Answer

Reserve requirements on bank deposits are set by the Board of Governors but within the specific limits imposed by Congress. The Federal Reserve Act of 1913 gives Congress the authority to set reserve requirements for both member and nonmember banks. Therefore, the Board of Governors cannot set reserve requirements at any level they desire or approved by the Federal Open Market Committee, nor can they exceed the specific limits set by Congress or the Secretary of the Treasury.

With Respect to Reserve Requirements on Bank Deposits, the Board