Question

Choose the phrase that best completes each sentence.

The Federal Reserve is a system of
.

To maximize employment, the Fed tries to make sure that
.

The Fed has the most direct influence over
.

Answer 1

- The Federal Reserve is a system of regional Federal Reserve Banks (12 regional banks plus the Board of Governors).
- To maximize employment, the Fed tries to make sure that interest rates and credit conditions stimulate demand enough to encourage hiring (without causing runaway inflation).
- The Fed has the most direct influence over short‑term interest rates (especially the federal funds rate) and the supply of bank reserves.