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1. medium of exchange
2.unit of account
3.store of value

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Contracting the supply of money and increasing interest rates to decrease Aggregate Demand and ultimately decrease inflation = Selling Bonds, Raising the Discount Rate and Reserve Requirement

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the actions the Federal Reserve takes to influence the level of real GDP and the rate of inflation in the economy

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Founded in 1913 by Congress, the Fed is the central bank of the U.S. It is an independent agency that supervises and regulates over 7,500 commercial banks. The U.S. is divided into 12 Federal Reserve districts, each with its own Federal Reserve bank.

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The Fed can use four tools to achieve its monetary policy goals: the discount rate, reserve requirements, open market operations, and interest on reserves. All four affect the amount of funds in the banking system. ... Discount rate changes are made by ReserveBanks and the Board of Governors.

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The U.S. government uses two types of policies—monetary policy and fiscal policy—to influence economic performance. Both have the same purpose: to help the economy achieve growth, full employment, and price stability. Monetary policy is used to control the money supply and interest rates.