Although the Federal Open Market Committee does not have formal authority to set ________ and the ________,it does possess the authority in practice.

Question

Quizplus · Accepted Answer

The Federal Open Market Committee (FOMC) does not have formal authority to set reserve requirements and the discount rate directly; these are under the purview of the Board of Governors of the Federal Reserve System. However, the FOMC effectively influences these areas through its monetary policy decisions. Reserve requirements are the amount of funds that a bank must hold in reserve against deposits made by customers, and the discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility.

Although the Federal Open Market Committee Does Not Have Formal