The Federal Reserve is the central bank in the United States and is responsible for setting the nation's monetary policy. This includes setting interest rates and engaging in open market operations [1]. By influencing the price of securities [2], open market operations and adjustments to the reserve requirements affect the price of money, or the interest rates.

These adjustments to the money supply can have a significant impact on the economy, as they affect borrowing costs for businesses and households. For example, if the Fed lowers the interest rate, it makes borrowing money cheaper, which encourages people to spend and businesses to invest. On the other hand, if the Fed raises the interest rate, it makes borrowing money more expensive, which can slow down economic activity.

The Federal Reserve also has the power to print money, which can be used to buy securities from banks. This increases the money supply and can have a stimulating effect on the economy, as it makes more money avai…