Briefly explain the role of the Federal Reserve and list the tools it uses to control the supply of

money and credit.

The Federal Reserve plays an important role in the United States. They are responsible for

regulating commercial banks, performing banking-related activities for the U.S Department of

the Treasury, providing services for banks, and setting monetary policy. However, not all banks

belong to the Fed. The Fed serves the banking needs of the government and of individual banks.

It regulates the nation's banking system, monitors and regulates the nation's money supply. The

Federal Reserve uses three major policy tools to control the growth of monetary supply and

credit are reserve requirements, the discount rate, and open market operations.