Question

Choose the statement about the Fed that is incorrect.

A.The policy decisions of the Federal Open Market Committee are implemented each month by a different Federal Reserve Bank.
B.The main​ policy-making organ of the Federal Reserve System is the Federal Open Market Committee.
C.The Board of Governors has seven​ members, who each serve a​ 14-year term.
D.There are 12 Federal Reserve banks and 12 Federal Reserve districts.

Answer 1

The incorrect statement about the Fed is the idea that policy decisions of the Federal Open Market Committee are implemented monthly by different Federal Reserve Banks. Policy-making is more centralized within the FOMC, and the meetings do not follow a monthly rotation among the regional banks.

Step-by-step explanation:

The statement about the Federal Reserve (the Fed) that is incorrect is: 'The policy decisions of the Federal Open Market Committee are implemented each month by a different Federal Reserve Bank.' In fact, the Federal Open Market Committee (FOMC) makes decisions regarding open market operations. The FOMC includes seven members from the Federal Reserve's Board of Governors and five voting members from the regional Federal Reserve Banks, with the New York district president being a permanent voting member.

Other members serve on a rotating basis. Additionally, the Board of Governors members serve 14-year terms, not to be confused with monthly rotations of policy implementation among the banks. The FOMC generally meets every six weeks to deliberate and implement monetary policy, not on a strict monthly basis.