What is the primary role of the Federal Reserve?

The primary role of the Federal Reserve is to serve as the central bank of the United States. As the nation's central bank, it is responsible for implementing monetary policy, regulating and supervising banks, maintaining financial stability, and providing financial services. The Federal Reserve aims to maximize employment, stabilize prices, and moderate long-term interest rates, which are critical for a healthy economy.

The significance of this role lies in its influence over the money supply and interest rates, which directly affect overall economic activity. By controlling inflation and fostering a stable financial environment, the Federal Reserve plays a vital part in ensuring economic growth and stability.

The other options focus on different functions that are not primarily the responsibility of the Federal Reserve. For instance, managing fiscal policy is typically the domain of the government and treasury, which involves controlling government spending and tax policies. Providing direct financial assistance to businesses is more aligned with specific government programs rather than the broader mandate of the Federal Reserve. Similarly, regulating international trade agreements involves trade policies and practices, which fall under the purview of entities like the Department of Commerce, not the Federal Reserve.