Government and the Economy Unit Test

Question

9 of 179 of 17 Items

Question
Which statement best describes the roles of the Federal Reserve?(1 point)
Responses

The Federal Reserve directs monetary policy, sets interest rates, and provides banking services for commercial banks.
The Federal Reserve directs monetary policy, sets interest rates, and provides banking services for commercial banks.

The Federal Reserve provides lending directly to consumers, businesses, and other banks.
The Federal Reserve provides lending directly to consumers, businesses, and other banks.

The Federal Reserve prints the currency for the United States and controls the amount of money in circulation.
The Federal Reserve prints the currency for the United States and controls the amount of money in circulation.

The Federal Reserve directs fiscal policy for the financial government, sets interest rates, and regulates the banking industry.

Answer 1

The statement that best describes the roles of the Federal Reserve is:

The Federal Reserve directs monetary policy, sets interest rates, and provides banking services for commercial banks.

This accurately reflects the main functions of the Federal Reserve, which include managing the nation's monetary policy, influencing interest rates, and serving as a bank for commercial banks.