They accept deposits from savers and then lend these

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: d then lend these funds to investors who are willing to borrow and pay interest on the loan. Figure 1 illustrates this relationship. Channeling Funds from Savers to Investors The Fed Board of Governors: also known as the Federal Reserve Board; consists of seven people who are appointed to nonrenewable 14year terms by the president of the United States and confirmed by the U.S. Senate. One of the governors is appointed by the president to act as chairman of the board. The current Chairman of the Board of The Fed 12 district federal banks: The United States is divided into 12 districts, each with a Federal Reserve Bank (FRB). Each district bank has a president who sits on the FOMC (federal open market committee). The Fed Federal Open Market Committee (FOMC): the committee that makes the decisions regarding the money supply in the United States. It consists of the 7 members of the Fed's Board of Govern...
View Full Document

Ask a homework question - tutors are online