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Category - Economics

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The Federal Reserve is a private institution that was authorized by the United States’ government in the early 20th century to regulate the quantity of money in the economy. The following are the functions of the Federal Reserve EXCEPT:
  1. lending to other banks
  2. impose trade tariffs
  3. regulate private banking
  4. control supply of money
Explanation
Answer: B - The Federal Reserve does not impose trade tariffs.

Key Takeaway: The Federal Reserve serves a number of function in monetary policies such as acting as a bankers’ bank by providing loans to other banks. The Reserve also makes sure that other banks are following federal laws and banking practices. Finally, it controls the supply of money.
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