The only true statement about the Federal Reserve is that it serves as the nation's central bank and regulates banking practices. Here option C is correct.
A. This is false. The Fed's decisions heavily impact everyday life through its control over interest rates, the money supply, and bank regulations. These decisions affect things like the cost of borrowing (e.g., mortgages, car loans), credit card interest rates, and even the stability of the financial system, which can influence job security and overall economic prosperity.
B. This is partially true. While the Fed doesn't dictate every specific criterion used by individual banks, it does set broader regulations and guidelines that banks must follow when evaluating loan requests. These regulations are meant to ensure financial stability and consumer protection.
C. This is true. The Fed is the central bank of the United States, and one of its primary functions is to regulate the banking system. It does this by setting interest rates, supervising banks, and ensuring the smooth functioning of the financial system.
D. This is false. While the Fed is an independent agency, it does not have the authority to review or approve the national budget. This power resides with the U.S. Congress.
Therefore, the only true statement about the Federal Reserve is C. The Fed serves as the nation's central bank and regulates banking practices.
Complete question:
Which statement about the Federal Reserve (the Fed) is true?
A - Unless a person works there, the Fed has little impact on everyday life.
B - The Fed determines the criteria banks must use to evaluate loan requests.
C - The Fed serves as the nation's central bank and regulates banking practices.
D - Because it is independent, the Fed reviews and approves the national budget.