The Fed is often considered the bankers' bank because it:

Question

Quizplus · Accepted Answer

The correct answer is D because the Federal Reserve (the Fed) holds bankers' reserves, provides banks with currency and loans, and clears their checks. This means that the Fed acts as a central bank, providing vital services to the banking system and promoting financial stability. The other options are incorrect because the Fed does not demand more currency than it has available (A), no longer has a monopoly on printing paper currency (B), and does not lower the discount rate in order to restrict the money supply (C).

The Fed Is Often Considered the Bankers' Bank Because It