Question

What are the responsibilities of the Federal Reserve? Check all that apply.

regulate and supervise the American banking industry
loan money to banks in a crisis
provide banking and loan services to individual Americans
manage the nation’s currency supply
loan money to corporations that want to raise capital

Answer 1

Apply to the Fed:
- Regulate and supervise the American banking industry — Yes.
- Loan money to banks in a crisis — Yes (the Fed is the "lender of last resort" via the discount window and emergency facilities).
- Manage the nation’s currency supply — Yes (issues Federal Reserve notes and conducts monetary policy).

Do NOT apply as routine responsibilities:
- Provide banking and loan services to individual Americans — No (the Fed does not offer personal banking or consumer loans).
- Loan money to corporations that want to raise capital — No (the Fed does not make routine loans to corporations; in extraordinary crises it can create emergency facilities to support corporate credit, but that is not a normal function).