Question

The Federal Reserve, commonly called the Fed (choose one):

a) Monitors international transactions
b) Controls spending and taxes
c) Tracks the money supply
d) Is the international governing body

Answer 1

The Federal Reserve, commonly known as the Fed, primarily tracks the money supply and is responsible for conducting monetary policy in the United States. It is a semi-decentralized central bank that operates with a degree of independence from political pressures. Hence option (c) is correct..

Step-by-step explanation:

The Federal Reserve, commonly called the Fed, primarily tracks the money supply in the United States. The Fed is the central bank of the U.S. and is an intricate part of the nation's financial system. It is unique in its structure and function, being semi-decentralized and combining government appointees with representation from private-sector banks.

Its organization includes a Board of Governors with seven members appointed by the President and confirmed by the Senate, serving staggered 14-year terms to minimize political influence on decision-making.

Among its responsibilities, the Federal Reserve conducts monetary policy, manages the fractional reserve banking system, and helps to regulate the banking industry. It operates independently of congressional approval and the President does not have the power to dismiss a Federal Reserve Governor.