Question

An important function of the U.S. Federal Reserve is to a. set the debt ceiling. b. control the supply of money. c. mint coins. d. fund Congressional spending.

Answer 1

Answer:

b. control the supply of money.

Explanation:

The Federal Reserve System ( popularly referred to as the 'Fed') was created by the Federal Reserve Act, passed by Congress in 1913, and began operations in 1914. It is just like all central banks, the Federal Reserve is a United States government agency. The following are the responsibilities of the Fed Reserves System;

- It has the power to supervise and regulate banks.

- They promote public goals such as economic growth, low inflation, and the smooth operation of financial markets (monetary policies).

- The Federal Reserve is the "lender of last resort."

Hence, an important function of the U.S. Federal Reserve is to control the supply of money. The monetary liabilities of the Federal Reserve include currency in circulation and reserves. The currency in circulation includes all of the US paper currency (dollar bill) that are available in the country while reserves refers to the minimum deposits being held for the U.S Treasury and depository financial institutions by the Fed.