<P> In 1933, by way of the Banking Act of 1933, the Federal Reserve Act was amended to create the Federal Open Market Committee (FOMC), which consists of the seven members of the Board of Governors of the Federal Reserve System and five representatives from the Federal Reserve Banks . The FOMC is required to meet at least four times a year (in practice, the FOMC usually meets eight times) and has the power to direct all open - market operations of the Federal Reserve banks . </P> <P> On November 16, 1977, the Federal Reserve Act was amended to require the Board and the FOMC "to promote effectively the goals of maximum employment, stable prices, and moderate long - term interest rates ." The Chairman was also required to appear before Congress at semi-annual hearings to report on the conduct of monetary policy, on economic development, and on the prospects for the future . The Federal Reserve Act has been amended by some 200 subsequent laws of Congress . It continues to be one of the principal banking laws of the United States . </P> <P> The passing of the Federal Reserve act of 1913 carried implications both domestically and internationally for the United States economic system . The absence of a central banking structure in the U.S. previous to this act left a financial essence that was characterized by immobile reserves and inelastic currency . Creating the Federal Reserve gave the Federal Reserve control to regulate inflation, even though the government control over such powers would eventually lead to decisions that were controversial . Some of the most prominent implications include the internationalization of the U.S. Dollar as a global currency, the impact from the perception of the Central Bank structure as a public good by creating a system of financial stability (Parthemos 19 - 28), and the Impact of the Federal Reserve in response to economic panics . The Federal Reserve Act also permitted national banks to make mortgage loans for farm land, which had not been permitted previously . </P> <P> Throughout the history of the United States, there has been an enduring economic and political debate regarding the costs and benefits of central banking . Since the inception of a central bank in the United States, there were multiple opposing views to this type of economic system . Opposition was based on protectionist sentiment; a central bank would serve a handful of financiers at the expense of small producers, businesses, farmers and consumers, and could destabilize the economy through speculation and inflation . This created even further controversy over who would select the decision - makers in charge of the Federal Reserve . Proponents argued that a strong banking system could provide enough credit for a growing economy and avoid economic depressions . Other critical views included the belief that the bill gave too much power to the federal government after the senate revised the bill to create 12 board members who were each appointed by the president . </P>

In the u.s. economy the money supply is controlled by the quizlet