Ace the Nevada Real Estate Exam 2026 – Unlock Your Path to Property Success!

The correct answer is that reserve requirements for banks are controlled by The Federal Reserve. The Federal Reserve, also known as the Fed, is the central bank of the United States and is responsible for setting monetary policy, which includes determining reserve requirements for financial institutions. These requirements dictate the minimum amount of reserves a bank must hold against its deposits, influencing the bank's ability to lend money and manage liquidity.

The Federal Reserve's role is crucial in regulating the banking system, ensuring stability in the financial markets, and controlling inflation. By adjusting reserve requirements, the Fed can either increase or decrease the amount of money circulating in the economy, thus affecting overall economic activity.

Other choices such as FNMA (Federal National Mortgage Association) and GNMA (Government National Mortgage Association) are involved in the secondary mortgage market but do not set reserve requirements. The FDIC (Federal Deposit Insurance Corporation) is tasked with insuring deposits at banks and acting as a supervisory body to maintain public confidence in the financial system but does not have control over reserve requirements.