Florida US History EOC 2025 – 400 Free Practice Questions to Pass the Exam

The Federal Reserve System was established in 1913 primarily to regulate the banking industry and stabilize the economy. Its creation was a response to financial panics that occurred in the late 19th and early 20th centuries, highlighting the need for a more flexible and secure banking system. By overseeing monetary policy, the Federal Reserve aims to manage inflation, maximize employment, and stabilize prices, which in turn helps prevent economic recessions and promotes growth.

The Federal Reserve achieves its goals through various mechanisms, including adjusting interest rates, conducting open market operations, and serving as a lender of last resort to banks. This ensures that financial institutions operate safely and can access liquidity during times of need, ultimately contributing to the overall health of the economy. Thus, the focus of the Federal Reserve is on maintaining economic stability and fostering a trustworthy banking environment, showcasing the importance of regulation in achieving these objectives.