How does the role of the Board of Governors compare to the role of the Federal Open Market Committee?(1 point)

Question

a. The Board of Governors oversee open market operations and set the target federal funds rate while the Federal Open Market Committee overlooks commercial banks.

b. The Board of Governors direct monetary policy and set the discount rate while the Federal Open Market Committee oversees open market operations and sets the target federal funds rate.

c. The Board of Governors direct monetary policy while the Federal Open Market Committee oversees open market operations as well as sets the target federal funds rate and discount rate.

d. The Board of Governors set the target federal funds rate while the Federal Open Market Committee implements the policies from the Board of Governors and sets the discount rate.

GPT-4o mini · Answer

The correct choice is: **b. The Board of Governors direct monetary policy and set the discount rate while the Federal Open Market Committee oversees open market operations and sets the target federal funds rate.** The Board of Governors is responsible for the overall direction of monetary policy and has the authority to set the discount rate. The Federal Open Market Committee (FOMC), which includes members of the Board of Governors and other Federal Reserve Bank presidents, is primarily responsible for conducting open market operations and setting the target federal funds rate.