Describe the Board of Governors of the Fed and the Open Market Committee (FOMC).

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Expert Solution

1) Board of Governors of the Federal Reserve is the main governing body that is responsible for the working of the Federal Reserve banks in the United States of America and implementing the monetary policies in the country. There are a total of 7 members on the board that run the Federal Reserve in the States. Each member has a 14 year term as a board member.

The Board functions independently and is not answerable to the government in power. One of its main functions is to prepare an annual report of the operations of the Federal Reserve.

2) Federal Open Market Committee is a branch of the Federal Reserve that deals with the nation's open market operations. It was formed in 1933 through The Banking Act. It is responsible for setting up the monetary policies for the nation by specifying objectives for the country's open market operations. The committee is responsible for setting the interest rate and deciding the money supply in the economy

The Committee consists of the seven members of the Board of Governors of the Fed, the president of the New York Fed, and four of the other eleven regional Federal Reserve Bank presidents, serving one year terms.

Rahul Sunny answered 1 year ago

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