When the Federal Reserve System was created, it was thought that its most important influence over monetary conditions would be
A) lending to banks to bolster their reserve positions.
B) quantitative easing.
C) the issuance of Federal Reserve notes.
D) the changing of reserve requirements.

Question

Quizplus · Accepted Answer

Lending to banks to bolster their reserve positions was considered the most important influence of the Federal Reserve System over monetary conditions when it was created. This was because providing liquidity to banks in times of need would help stabilize the banking system and the broader economy.

When the Federal Reserve System Was Created, It Was Thought