What is the purpose of the Fed's structure?
A) to give the President of the United States as many tools as possible to regulate the economy
B) to make sure all states are given equal access to monetary policy decisions
C) to keep the private sector out of the monetary policy-making arena
D) to keep the power of the Fed dispersed

Question

Quizplus · Accepted Answer

The purpose of the Fed's structure is to keep the power dispersed among the 12 Federal Reserve Banks, the Board of Governors, and the Federal Open Market Committee, to prevent any one entity from having too much control over monetary policy decisions. This is why the Fed is often referred to as a decentralized system. Choice A is incorrect because the President's tools for regulating the economy are separate from those of the Fed. Choice B is incorrect because all states have equal representation on the Board of Governors, but not necessarily equal access to monetary policy decisions. Choice C is incorrect because the private sector is involved in monetary policy-making through the participation of private banks in the Federal Reserve System.

What Is the Purpose of the Fed's Structure