Question

The main function of the Federal Reserve System is to a. clear checks from member banks. b. serve as the fiscal agent for the federal government. c. control the money supply. d. set reserve requirements of banks.

Answer 1

c. control the money supply

Step-by-step explanation:

The Federal Reserves perform three primary functions which include conducting the country’s monetary policy, supervise and regulate commercial banking operations, and maintaining an effective and efficient payment system.

Monetary policy is the function most businesses consider most important. It involves strategic actions taken by the Federal Reserve to control the supply of money and credit to create price stability and maintain optimum sustainable economic growth. The Fed has several tools to regulate the money supply; they include the Fed fund rate, the discount rate, and open market operations.