Virtually all economists agree that the key to the Fed's power lies in its ability to

Question

Quizplus · Accepted Answer

Controlling the reserves of the banking system is the key to the Fed's power because it enables the Fed to influence the supply of money and credit in the economy. By adjusting the reserves, the Fed can increase or decrease the amount of money that banks have available to lend, which affects interest rates and overall economic activity. The Fed also uses open market operations to buy and sell securities, which can further affect the supply of money and credit.

Virtually All Economists Agree That the Key to the Fed's