The central bank is responsible for monitoring the money supply and the general stability and safety of the u.s. banking system
Central banks conduct monetary policy by adjusting the money supply, generally through open market operations. For example, central banks can reduce the money supply by selling government bonds under sale-and-repurchase agreements, thereby raising money from commercial banks.
Central banks regulate the circulation of currencies to keep the economy healthy. Manipulating interest rates, printing currencies, and setting bank reserves are all tools used by central banks to control the money supply.
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