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Answer:
The federal reserve determines the size of the money supply.
Explanation:
In almost every country, the central bank of such country is responsible for handling the supply of money. For example, the Federal Reserve controls the supply of money in the US.
The Federal Reserve is also regarded as the central bank of the United States of America, which is responsible for handling the economical and financial matters of the state.
It is to be noted that the Federal Reserve does not function in the duties of a commercial bank. In fact, it serves as a banker to the commercial banks in the United States and issues a monetary policy at regular intervals.
In case of inflation in the United States, the Federal Reserve sets the interest rate of banks for the customers to bring the economic stability in the country and the exact opposite is done to control excess deflation.
Hence, it can be stated that the Federal Reserve is the central bank of America and determines the size of the money supply in the United States of America.
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