Tool used by the Federal Reserve

Tool used by the Federal Reserve

Deposit insurance is one safeguard that has been implemented against a potential bank run. After the financial crisis, the Federal Reserve increased the amount of money insured from $100,000 to $250,000. A bank customer has asked you why the increase was made and what this means for her money at your bank. Explain to the customer how the increase was a tool used by the Federal Reserve to help control the money supply, and discuss the benefits this brings to the customer. Your response must be at least 75 words in length


 

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