What is a key power of the Fed?

Question

Quizplus · Accepted Answer

The key power of the Fed is to expand and contract the amount of credit available in the United States by adjusting monetary policy tools like interest rates, reserve requirements, and open market operations. This can help control inflation and promote economic growth. The Fed does not have the power to change tax rates or directly lower the budget deficit or national debt, although its actions can indirectly impact government finances. Therefore, options A, B, and C are incorrect. Option E is also incorrect as it suggests the Fed has the power to directly lower the national debt, which is not the case.

What Is a Key Power of the Fed