Question

Refer to the article "Making Money" in your Money, Money, Money magazine for a complete version of this text. Based on the information in the "Paper Money" section of the article, what is the relationship between the Federal Reserve and the money supply?


The organization creates the designs for bills and coins in circulation, ensuring they reflect American values.


The organization maintains the five mint companies in the United States where damaged coins are recycled.


The Federal Reserve determines when bills should be removed from circulation and when new bills should be produced.


The Federal Reserve has two printing companies in the United States where it produces new bills for circulation.

Answer 1

The correct answer is C) The Federal Reserve determines when bills should be removed from circulation and when new bills should be produced.

Although there is no article attached, we can say that the relationship between the Federal Reserve and the money supply is the following: "The Federal Reserve determines when bills should be removed from circulation and when new bills should be produced."

The Federal Reserve or commonly known as the Fed is the Central bank of the United States. In a close work relationship with the US Treasury Department, they pay close attention to the financial system of the country. The Fed and the Treasury Department decide on how much money needs to be printed each year based on the demand expected, the money that is going to be destroyed, and the inventory that exists in the banks.

Answer 2

Answer: C is the correct answer

Explanation: