Question

The Federal Reserve System affects the rest of the U.S. banking system by

A)enforcing laws against insider trading.
B)lending financial resources to banks.
C)insuring deposits in bank accounts.
D)buying bad assets from banks.

Answer 1

Lending financial resources to banks.

Step-by-step explanation:

The Banks have the ability to provide loans to the customers. When the amount of money that they possess is not enough to provide the requested loans, the banks could asked the federal reserve to provide them with financial resources to fulfill the request.

As the number of loans that the bank can fulfill grow, the amount of profit that the bank can get from the interest also increased. This is how banks get large portion of their income.