Final answer:
The main role of the Federal Open Market Committee (FOMC) is to conduct open market operations, impacting interest rates and money supply to regulate the economy. The FOMC is an integral component of the Federal Reserve System, which also regulates State Member Banks and enforces financial laws.
Step-by-step explanation:
The responsibility of the Federal Open Market Committee (FOMC) is chiefly to make decisions pertaining to open market operations, which are a key tool used by the Federal Reserve to implement monetary policy. Specifically, the FOMC oversees the buying and selling of government securities in the market. These actions directly impact interest rates and the money supply, which, in turn, influence the overall economic activity. The committee consists of the Board of Governors of the Federal Reserve System and rotating members from the regional Federal Reserve Banks.
Beyond open market operations, the Federal Reserve System plays a critical role in regulating State Member Banks and enforcing consumer protection laws. Additionally, the Fed manages the reserve requirements and discount rates, which collectively help stabilize the nation’s financial system and support economic growth.