Question

The fed seeks to promote stability of financial markets because question content area bottom part 1

a. congress directed them to do so by the employment act of 1946.
b. they want to lift the selfesteem of workers.
c. unstable markets result in increased efficiency.
d. lower output occurs over time when there is not an efficient matching of savers and borrowers.

Answer 1

The Fed promotes financial stability to ensure an efficient match of savers and borrowers, contributing to economic growth and stability, in accordance with the Employment Act of 1946.

The correct option is (d) lower output occurs over time when there is not an efficient matching of savers and borrowers.

Step-by-step explanation:

The Federal Reserve (the Fed) seeks to promote the stability of financial markets to avoid problems such as financial panics, which disrupt banking services and negatively impact the economy. The correct answer to the question provided is option (d) lower output occurs over time when there is not an efficient matching of savers and borrowers.

By promoting stability, the Fed aims to ensure efficient operation of the financial markets, helping to match savers and borrowers effectively, which in turn supports economic growth, stable prices, and full employment. The implementation of monetary policy by the Federal Reserve, such as purchasing assets off banks' balance sheets, is critical in maintaining these conditions. Moreover, legislation like the Employment Act of 1946 instructed the federal government to use practical means to achieve these economic goals.