Which organization is primarily responsible for monetary policy in the United States?

• A. Federal Communications Commission
• B. Federal Reserve Board
• C. Federal Trade Commission
• D. Securities and Exchange Commission

Answer: (B)

Monetary policy is about actions that influence the money supply and interest rates to guide the overall economy. In the United States, this responsibility lies with the Federal Reserve System, specifically its Board of Governors and the Federal Open Market Committee, which together set and implement policy. By tools like open market operations (buying or selling government securities), adjusting the target for the federal funds rate, and changing reserve requirements, the Fed shapes borrowing costs, liquidity, and overall economic activity to promote price stability and maximum employment.

The other agencies regulate distinct areas of the economy: the Federal Communications Commission oversees communications, the Federal Trade Commission enforces consumer protection and antitrust laws, and the Securities and Exchange Commission regulates securities markets. They do not set monetary policy.