Final answer:
The Federal Reserve System controls the supply of money available for loans through activities such as setting the federal funds rate and issuing treasury bonds.
Step-by-step explanation:
The Federal Reserve System controls the supply of money available for loans through monetary policy. One of the activities it does is setting the federal funds rate, which is the interest rate at which banks lend to each other. By increasing or decreasing this rate, the Federal Reserve can influence the cost of credit available to banks and ultimately control the money supply for loans.
Another activity the Federal Reserve System does to control the supply of money is issuing treasury bonds. Treasury bonds are government securities that serve as a way for the government to borrow money from the public. When the Federal Reserve purchases more treasury bonds, it increases the money supply, and when it sells treasury bonds, it decreases the money supply.
Therefore, among the given options, option 1 (setting the federal funds rate) and option 2 (issuing treasury bonds) are the activities that the Federal Reserve System does to control the supply of money available for loans.