Question

The Federal Reserve is in charge of carrying out monetary policy. What is the primary task of the Federal Reserve as part of monetary policy?

A. managing the nation's international trade
B. printing the nation's currency
C. controlling the nation's money supply

Answer 1

The primary task of the Federal Reserve as part of monetary policy is to control the nation's money supply.

Step-by-step explanation:

The primary task of the Federal Reserve as part of monetary policy is to control the nation's money supply. The Federal Reserve manages interest rates and credit conditions to influence the level of economic activity. They use three traditional tools to implement monetary policy: open market operations, changing reserve requirements, and changing the discount rate.