What restricts the Fed's ability to write checks and purchase U.S. securities?
A) Congress; the Fed must receive a budget allocation from Congress before it can write a check.
B) The gold requirement; the Fed cannot write a check unless it has a sufficient amount of gold to back the expenditure.
C) Reserve requirements; the Fed must maintain 20 percent of its assets in the form of cash against the deposits that it is holding for commercial banks.
D) Nothing; the Fed can create money simply by writing a check on itself.

Question

Quizplus · Accepted Answer

The Federal Reserve can create money by writing a check on itself, as it has the authority to issue currency and manage the money supply without needing a budget allocation from Congress or backing by gold.

What Restricts the Fed's Ability to Write Checks and Purchase