APMacro: Federal Reserve

Federal Reserve System
The Federal Reserve System is the central banking system of the United States, specifically designed to shield its policymakers from political pressure. The Federal Reserve Board of Governors consists of seven members who are appointed by the president and confirmed by the Senate to serve 14-year terms. The 12 regional banks are publicly-controlled, yet privately owned by the member banks. They can be thought of as “bankers’ banks,” providing local banks with some of the same services local banks provide customers: a safe place to store savings and a place to get loans. The Federal Open Market Committee (FOMC) buys and sells government securities to change the nation’s money supply.

The Fed’s primary responsibility is to control the money supply. It also determines the reserve requirement, which is the percentage of deposits banks must hold and cannot loan out. The Fed also loans money to member banks, charging the discount rate as interest on the loan. In addition, the Fed issues currency, clears checks, serves as the federal government’s bank, and supervises the member banks.

1) Learnerator: Demand & Supply Equilibrium #1-24, Macroeconomic issues #1-15



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