Which statement best describes the roles of the Federal Reserve?

Question

A. The Federal Reserve directs fiscal policy for the financial government, sets interest rates, and regulates the banking industry
B. The Federal Reserve directs monetary policy, sets interest rates, and provides banking services for commercial banks.
C. The Federal Reserve provides lending directly to consumers, businesses, and other banks.
D.The Federal Reserve prints the currency for the United States and controls the amount of money in circulation.

Answer 1

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

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

This statement accurately reflects the primary functions of the Federal Reserve, which include managing monetary policy to influence the economy, setting key interest rates (like the federal funds rate), and serving as a bank for commercial banks.