Federal Reserve Board

Definition

The Federal Reserve Board is a group of seven individuals who governs the Federal Reserve System, which serves as America's central bank. They control monetary policy and aim to maintain economic stability.

Analogy

Imagine if your school had its own "money police" who controlled how much money was circulating at any given time - they could add more money during lunchtime when everyone wants to buy food but take some away during class time when no one needs it. That's kind of what the Federal Reserve Board does with US currency!

Related terms

Monetary Policy: A process by which a country's central bank controls either cost of very short-term borrowing or monetary base, often targeting inflation or interest rate to ensure price stability and general trust in currency.

Federal Reserve System: The central banking system of the United States, which controls the production and distribution of money and credit in the country.

Inflation: A general increase in prices and fall in the purchasing value of money.