Final answer:
Conducting fiscal policy is not a duty of the Federal Reserve, which instead handles monetary policy. Fiscal policy involves government spending and taxation and is managed by Congress and the President, while the Federal Reserve influences the economy by controlling the money supply and interest rates.
Step-by-step explanation:
Conducting fiscal policy is not a duty of the Federal Reserve. Instead, the Federal Reserve is responsible for monetary policy, which includes decisions to expand or contract the money supply. Fiscal policy, on the other hand, involves changes in government spending and taxation and is primarily the responsibility of Congress and the President. Examples of fiscal policy include raising or lowering taxes, increasing or decreasing government spending on various programs, and managing the budget deficit or surplus. An example of something that would not be considered fiscal policy would be the Federal Reserve changing interest rates, as this is a tool of monetary policy.
Monetary policy is the Federal Reserve's decision to either expand or contract the money supply to influence the cost and availability of credit. During economic downturns like the Great Recession, the Federal Reserve may use monetary policy to stimulate the economy by lowering interest rates and increasing the money supply, as fiscal policy options might be limited due to budget deficits and public debt concerns.