Question

The Federal Reserve manages the nation’s currency and money supply by

setting interest rates and acting as a lender to banks.

overseeing bank collections and payments on loans.

dictating criteria and setting loan terms for banks.

offering investment advice and adjusting interest rates.

Answer 1

Setting interest rates and acting as a lender to banks.

Answer 2

I believe the answer is: Setting interest rates and acting as a lender to banks.

Setting interest rate would influence people's tendency to save. When they implement high interest rate, people would more likely to put their money in savings.

This would gradually improve the value of nation's currency. Lending money to banks is being done in order to ensure that the banks had the cash supply necessary to sustain their operation.