SIE practice questionmediumFOMC
The Federal Open Market Committee (FOMC) is responsible for:
- ADirecting open market operations and setting the federal funds rate target✓ Correct answer
- BRegulating the securities industry
- CSetting tax policy for the federal government
- DInsuring bank deposits
Explanation
Why A — Directing open market operations and setting the federal funds rate target
The FOMC directs open market operations (buying and selling government securities) and sets the target range for the federal funds rate. The FOMC meets approximately eight times per year. It consists of the seven members of the Board of Governors plus five Federal Reserve Bank presidents (the president of the New York Fed always serves, and the other four rotate). Tax policy (A) is Congress's role, securities regulation (C) is the SEC's role, and deposit insurance (D) is the FDIC's role.
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