Question

The federal backing for the money in the United States comes from: Group of answer choices providing sufficient quantities of precious metals such as gold and silver to cover the amount of paper money in circulation. pledging physical assets, such as land, natural resources, and public buildings as collateral for outstanding currency. control over the money supply designed to keep the value of money relatively stable over time. protecting checkable deposits at financial institutions with deposit guarantees.

Answer 1

control over the money supply designed to keep the value of money relatively stable over time.

Step-by-step explanation:

The Federal Reserve System (the 'Fed) was created by the Federal Reserve Act, passed by Congress in 1913. The Fed began operations in 1914. It was founded by President Woodrow Wilson under the Federal Reserve Act, which was aimed at backing each banks in order to put a definitive end to the bank panics of the 1800s.

Like all central banks, the Federal Reserve is a government agency that is saddled with the following responsibilities;

I. Regulating banking activities (it has the power to supervise and regulate banks).

II. Providing banking services to all the commercial banks in the country (the Federal Reserve is the "lender of last resort).

III. Controlling the issuance of currency in United States of America (it facilitate and enhances public goals such as low inflation, economical growth, and the smooth running of financial markets).

Hence, the federal backing for the money in the United States comes from control over the money supply designed to keep the value of money relatively stable over time through the implementation of monetary policies.

The monetary policy of the "Fed" helps to maintain the purchasing power of money by making it relatively scarce.