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The Federal Reserve System resembles the U.S. constitution in that it was designed with many checks and balances. Explain and illustrate.
There are several checks and balances in the Federal Reserve System. The checks and balances are put in place by placing each of the tools of the Federal Reserve System under the authority of a different group within the system. The Board of Governors has the authority to change the bank reserve requirements; however, the board of directors for individual Reserve Banks can change the discount rate. Even this change has to be approved by the Board of Governors. On the ...
Federal Reserve System is discussed very comprehensively in this explanation..