The Federal Reserve System

Question

Quizplus · Accepted Answer

The Federal Reserve System was established by Congress in 1913 in response to the Panic of 1907, which demonstrated the need for a central banking system to stabilize the economy.

Option A is incorrect because while the Bank of the United States played a precursor role in establishing the Federal Reserve, it was not a direct outgrowth.

Option B is incorrect because while the Federal Reserve is subject to congressional oversight, it is an independent entity that is not directly controlled by Congress.

Option D is incorrect because the minting of coins is the responsibility of the United States Mint, which is a separate entity from the Federal Reserve.

Option E is incorrect because while the Federal Reserve regulates and supervises a large portion of the country's financial institutions, not all financial institutions are included by law in the Federal Reserve System.