What is the responsibility of each of the twelve federal reserve’s banks in their districts? a. they set the prime rate b. they monitor functioning of banks in their through onsite and offsite reviews c. they assess taxes in their district d. they write fiscal policies

The correct answer is: ". they monitor functioning of banks in their through onsite and offsite reviews".

The Federal Reserve is the US Central Bank. Its functions consist on controlling the money supply in order to soften recession periods, to maintain  acceptable levels of inflation (price levels) and to ensure maximum employment figures. In order to implement the abovementioned policies, the Fed has divided the territory of the US into 12 districts, locating on each one of the 12 Federal Reserve’s banks.

One of their main functions consists on gathering data about the functioning of banks and other types of businesses within their district and about what the region might need. These information would be transferred to the Directives and to the monetary policymakers.

Originally, each of these 12 offices established in own discount rates for their offer of financial products, but as TICs entered deeply in the sector it became mandatory that all Federal Reserve’s banks acted uniformily at setting interest rates. Therefore A is not eligible.

A central bank is never involved with fiscal policy, this is why answers C and D are not eligible.

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