Which of These Is a Provision of the Federal Reserve

question 27

Multiple Choice

Which of these is a provision of the Federal Reserve Act or part of subsequent legislation that contributes to the independence of the Fed?

• A) The Fed's actions are subject to executive branch control.
• B) Appointments to the Federal Reserve Board are staggered so that one board member's appointment expires every other year.
• C) Members of the Federal Reserve Board cannot be reappointed.
• D) The Federal Reserve System is subject to congressional oversight.

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Definitions:

Market Rate

The prevailing price or cost of goods, services, or labor in a competitive market, determined by supply and demand forces.

Risk-Free Rate

The return on an investment with no risk of financial loss, often represented by the yield on government bonds.

Discount Rate

The interest rate charged to commercial banks and other financial institutions for the loans they take from the central bank or the rate used in discounted cash flow analysis to determine the present value of future cash flows.

Annually

Pertaining to an occurrence, calculation, or payment that happens every year.