Question

When Congress established the Federal Reserve in​ 1913, its main responsibility was
A. to adjust interest rates.
B. to design tax policies.
C. to control the money supply.
D. to make discount loans to banks suffering from large withdrawals by depositors.

Answer 1

Answer:

Option D.

Explanation:

To make discount loans to banks suffering from large withdrawals by depositors, is the right answer.

Passed by the U.S. Congress and signed into law by Woodrow Wilson, the then U.S. President, the Federal Reserve Act was an act that founded the Federal Reserve System of the United States. This system was comprised of twelve regional Federal Reserve Banks, which were responsible for controlling the money supply, offering loans and overlooking the banks and to serve as the lender of ultimate possibility. The main job of this reserve was to provide discount loans to banks undergoing massive withdrawals by depositors. Thus Option D will be the right answer.