Chapter

15.2. The Federal Reserve System*

From IntroductionToBusiness OP 8D04gAa

Concepts

1. How do credit cards function as borrowing rather than money?

   "Credit cards are a form of borrowing. When a bank issues a credit card to a consumer, it gives a short-term loan to the consumer by directly paying the seller for the consumer’s purchases. The consum

2. What is the Federal Reserve System and why was it created?

   "Before the twentieth century, there was very little government regulation of the U.S. financial or monetary systems. In 1907, several large banks failed, creating a public panic that led worried depo

3. How does the Federal Reserve manage the money supply?

   "The most important function of the Federal Reserve System is carrying out monetary policy. The Federal Open Market Committee (FOMC) is the Fed policy-making body that meets eight times a year to make

4. How does the Federal Reserve regulate credit and support payments?

   "Another activity of the Federal Reserve System is setting rules on credit. It controls the credit terms on some loans made by banks and other lending institutions. This power, called selective credit

5. How did the Federal Reserve respond to the 2007–2009 financial crisis?

   "Much has been written over the past decade about the global financial crisis that occurred between 2007 and 2009. Some suggest that without the Fed’s intervention, the U.S. economy would have slipped