"In many ways, the Federal Reserve does not control the level of interest rates nor the money supply. Rather, this is controlled by the actions of individual banks throughout the economy." 

Explain the rationale behind this statement. 

What action is required by the banks for Federal Reserve policy to be effective in stimulating the economy? 

What can the banks do to negate a Fed stimulus?

Answer rating: 100% (QA)

The rational behind the statement is that Federal Reserve makes policies sets targets of inflation r... View the full answer