One of the primary purposes of the Federal Reserve System (the Fed)is to
A)guard against national gasoline shortages by maintaining large stores of oil at the country's military bases.
B)guard against state governments defaulting on their debt obligations by limiting budget expenditures.
C)guard against the federal government defaulting on its debt obligations by limiting budget expenditures.
D)guard against bank failures during a sudden economic scare by making sure that banks
Do not overextend themselves.

Question

Quizplus · Accepted Answer

The primary purpose of the Federal Reserve System (the Fed) is to safeguard the economy by ensuring the stability of financial institutions, particularly banks. This is done by regulating the money supply, setting interest rates, and preventing bank failures during economic crises. Therefore, option D is the correct choice as it addresses the Fed's primary purpose. The other options are not accurate descriptions of the Fed's objectives.

One of the Primary Purposes of the Federal Reserve System