California Real Estate Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 740

Which of the following is not a function of the Federal Reserve System?

To print money

The correct answer is related to the misconception about the Federal Reserve's role in the money supply. While the Federal Reserve plays a crucial role in managing the country’s monetary policy, it does not directly print money. The actual physical printing of currency is the responsibility of the U.S. Department of the Treasury, specifically the Bureau of Engraving and Printing.

The Federal Reserve does influence the money supply through various mechanisms such as open market operations and setting reserve requirements but does not engage in the direct printing of physical cash. By controlling interest rates and regulating banks, the Federal Reserve aims to maintain economic stability, control inflation, and manage liquidity in the banking system. It also manages the country's foreign exchange reserves and gold holdings to support the stability of the nation’s currency in international markets.

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To control interest rates

To regulate banks

To manage the country's foreign exchange and gold reserves

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