Final answer:
Lending funds to credit-worthy private firms is not a normal duty of the Federal Reserve. The Fed's main roles include regulating the money supply through monetary policy and maintaining financial stability, which can indirectly benefit private firms during economic crises by ensuring liquidity in the credit markets.
Step-by-step explanation:
Lending funds to credit-worthy private firms is not a duty of the Federal Reserve. The primary responsibilities of the Federal Reserve include regulating the supply of money in the economy through monetary policy, ensuring the stability of the financial system, and acting as a lender of last resort during financial crises. It conducts monetary policy by influencing the cost of credit and adjusting the reserve requirements for banks. The Federal Reserve may engage in credit easing, which is the extension of central bank lending to improve liquidity in various credit markets, but that does not equate to directly lending to private firms under normal circumstances.
The Federal Reserve's role in 'quantitative easing' during recession periods involves purchasing assets from banks, such as government bonds or mortgage-backed securities, to inject liquidity into the financial system. It is not in the Fed's mandate to directly lend to private firms; however, in times of crisis, like the 2008-2009 recession, the Federal Reserve can indirectly assist private firms by ensuring liquidity and functioning credit markets, thus not directly lending to them under normal operations.