select the correct answer. which statement is true? a. people throughout history have used only currency…

select the correct answer. which statement is true? a. people throughout history have used only currency notes for financial transactions. b. the reserve banks determine tax rates. c. only the federal reserve can buy government securities. d. the federal reserve affects monetary policy. e. the federal reserve affects fiscal policy.

select the correct answer. which statement is true? a. people throughout history have used only currency notes for financial transactions. b. the reserve banks determine tax rates. c. only the federal reserve can buy government securities. d. the federal reserve affects monetary policy. e. the federal reserve affects fiscal policy.

Answer

Brief Explanations:

  • Option A: Throughout history, various forms like barter, gold - coins were used, not just currency notes.
  • Option B: Reserve Banks do not determine tax rates; tax rates are set by legislative bodies.
  • Option C: Other entities can also buy government securities.
  • Option D: The Federal Reserve uses tools like open - market operations, reserve requirements, and discount rates to influence the money supply and interest rates, thus affecting monetary policy.
  • Option E: Fiscal policy is related to government spending and taxation, and the Federal Reserve has no direct control over it.

Answer:

D. The Federal Reserve affects monetary policy.