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What is the "Constational question" involved here? is the existence of the Fed constitutional?

A. The Constivution explitily forbids establahing a central bank; however, there is still a debate whether the Federal Reserve Syatem is a centrat bark or not
B. The Consttution does not directy ditcuss a central banking system, however, the Feds conabtutionally was confirmed by the Supreme Court
C. The Constitupn aliows for the creation of a centrai banking syatem only it is remains fully independent of the government. The Supenme Court has upheid that the Fed meets this criteria.
D. The Constaition eqpilitly cals for the establehment of a central bark; howevec, there is stal a debate whether the Federal Reserve Byatem is a central bank or nol

2 Answers

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Final answer:

The constitutional question involves whether the existence of the Federal Reserve is constitutional or not, with different interpretations and debates regarding its establishment and role.

Step-by-step explanation:

The constitutional question involved here is whether the existence of the Federal Reserve is constitutional or not.

Option A states that the Constitution explicitly forbids establishing a central bank, but there is still a debate about whether the Federal Reserve System is a central bank or not.

Option B states that the Constitution does not directly discuss a central banking system, but the Fed's constitutionality was confirmed by the Supreme Court.

Option C states that the Constitution allows for the creation of a central banking system only if it remains fully independent of the government, which the Supreme Court has upheld that the Fed meets this criteria.

Option D states that the Constitution explicitly calls for the establishment of a central bank, but there is still a debate about whether the Federal Reserve System is a central bank or not.

User Zinga
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3 votes

Final answer:

The constitutionality of the Federal Reserve System is not directly mentioned in the Constitution, but has been upheld by the Supreme Court. Option B is the correct answer, specifying that the Fed's constitutionality was confirmed.

Step-by-step explanation:

The student is asking about the constitutional question surrounding the existence of the Federal Reserve System, often referred to as 'the Fed.' The correct option is B, which states: The Constitution does not directly discuss a central banking system, however, the Fed's constitutionality was confirmed by the Supreme Court. The Federal Reserve was established in 1913 and though it is not explicitly mentioned in the Constitution, its creation was based on Congress's power to coin money and regulate its value. Over the years, its constitutionality has been confirmed by the Supreme Court, ensuring that it operates within the bounds of the law as the nation's central bank. It performs critical functions such as regulating financial institutions, conducting monetary policy, overseeing the payment system, and more while being semi-decentralized to insulate it from political pressure.

User Eki Eqbal
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