ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The Fed’s main duties include conducting national monetary policy, supervising and regulating banks, maintaining financial stability, and providing banking services. The Federal Open Market Committee is the Fed’s monetary policy-making body and manages the country’s money supply.

Detailed explanation-2: -The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system.

Detailed explanation-3: -The Fed controls the supply of money by increas-ing or decreasing the monetary base. The monetary base is related to the size of the Fed’s balance sheet; specifically, it is currency in circulation plus the deposit balances that depository institutions hold with the Federal Reserve.

Detailed explanation-4: -The Federal Reserve’s primary responsibility is to keep the economy stable by managing the supply of money in circulation. The Department of the Treasury manages federal spending. It collects the government’s tax revenues, distributes its budget, issues its bonds, bills, and notes, and literally prints the money.

Detailed explanation-5: -The Federal Reserve monitors financial system risks and engages at home and abroad to help ensure the system supports a healthy economy for U.S. households, communities, and businesses.