2
QuizMultiple Choice

The American Market Economy — Test

Question 2 • Economics

What role does the Federal Reserve play? Choose three correct answers.

Answer
A
Regulate the banking industry
B
Loan money to banks
C
Transfers any profits to the Treasury
D
Give corporate loans
E
Give individual loans

Explanation

The Federal Reserve supervises and regulates banks, and it can lend money to banks, especially to support the financial system. After covering its expenses, it generally transfers its profits to the U.S. Treasury. It does not ordinarily make loans directly to businesses or individuals.

AI-written and checked against the verified answer.

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