Why does the Federal Reserve aim to control the money supply, and what are the potential economic implications of failing to do so?

• A. To increase government revenue; failure can lead to budget deficits.
• B. To control unemployment rates; failure can lead to labor shortages.
• C. To regulate international trade; failure can lead to trade imbalances.
• D. To stabilize prices and control inflation; failure can lead to hyperinflation or deflation.

Answer: (D)