Progressive Movement Practice Exam

Which entity has largely controlled the United States banking system since 1913?

1. United States Supreme Court

2. Federal Reserve System

3. Federal Deposit Insurance Corporation

4. President's Council of Economic Advisors

The correct answer is: Federal Reserve System

The Federal Reserve System has largely controlled the United States banking system since its establishment in 1913. This central banking system was created to provide the nation with a safer, more flexible, and more stable monetary and financial system. Its primary responsibilities include regulating and supervising banks, managing the country's monetary policy, and providing financial services to depository institutions, the U.S. government, and foreign official institutions. The Federal Reserve plays a critical role in influencing interest rates and controlling the money supply through various tools, such as open market operations and the setting of reserve requirements for banks. Its actions are essential for promoting stable economic growth, full employment, and stability in prices. Given these responsibilities and functions, the Federal Reserve System stands out as the entity that has effectively overseen the banking system in the United States for more than a century. Other entities mentioned, such as the United States Supreme Court, the Federal Deposit Insurance Corporation, and the President's Council of Economic Advisors, have important roles in governance and financial oversight but do not possess the same level of direct control over the banking system as the Federal Reserve.