ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -It is the Federal Reserve’s actions, as a central bank, to achieve three goals specified by Congress: maximum employment, stable prices, and moderate long-term interest rates in the United States (figure 3.1).

Detailed explanation-2: -Answer and Explanation: The Fed does not provide banking services to consumers. It is tasked with oversight over the banking sector, regulating the money supply in the economy and implementing monetary policies.

Detailed explanation-3: -Answer and Explanation: The correct answer is b: reducing income inequality. The Federal Reserve is described as the central bank of the United States. As the country’s monetary authority, the Federal Reserve has certain objectives, which is known as a dual mandate.

Detailed explanation-4: -As the central bank of the United States, the Federal Reserve System has the responsibility of controlling the nation’s money supply. The Fed has three major tools that it can use to affect the money supply. These tools are 1) changing reserve requirements; 2) changing the discount rate; and 3) open market operations.