Question

In the U.S the supply of money is determined by

	a.	the price level.
	b.	the Treasury and Congressional Budget Office.
	c.	the Federal Reserve System.
	d.	the demand for money.

Answer 1

In a country the money supply will be determined by the central bank of the country, for the U.S the central bank is called the Federal Reserve. The Fed is responsible for controlling the money supply in the economy, the Fed has got various tools to control the money supply in the economy such as reserve requirement , open market operations, discount rate. The Fed is considered as an independent agency which allows them to work efficiently.

Ans: c). The Federal Reserve system.