Which of the following is a power that only the federal government has regarding money?

Prepare for CGFM Exam 1 – Governmental Environment. Utilize flashcards and multiple-choice questions with explanations and hints. Ace your exam!

The authority to create money is a power exclusively held by the federal government, specifically through its central banking system, which in the United States is the Federal Reserve. This centralized institution has the unique ability to manage the country's money supply and implement monetary policy, which includes not only the printing of physical currency but also the creation of digital money within the banking system.

This power is fundamental to maintaining economic stability and controlling inflation, as the federal government can adjust the amount of money in circulation based on economic conditions. Other entities, such as state governments or private entities, do not have the legal authority to create official currency, which distinguishes this power as solely federal.

In contrast, the powers to tax, establish budgets, and issue bonds may be shared among various levels of government, including state and local authorities. Each of these powers serves specific functions within economic governance, but they do not pertain to the creation of money itself.

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