The twin responsibilities of the Federal Reserve are:
A) to maintain full employment and balance the federal budget.
B) to ensure price stability and maintain full employment.
C) to ensure price stability and regulate international trade.
D) to print money and ensure price stability.

Question

Quizplus · Accepted Answer

The Federal Reserve's twin responsibilities are to ensure price stability, which often means keeping inflation in check, and to maintain full employment. These are the two main goals of the central bank's monetary policy. Choice A is incorrect because balancing the federal budget is the responsibility of the government's fiscal policy, not the central bank's monetary policy. Choice C is incorrect because regulating international trade is not one of the Federal Reserve's responsibilities. Choice D is incorrect because while the Federal Reserve has the authority to create money, its primary responsibility is not to print money, but to ensure price stability and maintain full employment.

The Twin Responsibilities of the Federal Reserve Are