Which activity is part of the Federal Reserve System's function to control the supply of money for loans?

Setting the discount rate is a fundamental activity of the Federal Reserve System that influences the supply of money available for loans. The discount rate is the interest rate charged to commercial banks for borrowing funds from the Federal Reserve. When the Fed adjusts the discount rate, it directly affects the cost of borrowing for banks, which in turn influences how much money banks can and will lend to businesses and consumers.

When the discount rate is lowered, borrowing becomes cheaper for banks, encouraging them to lend more. This increase in lending leads to a boost in the overall money supply, thereby facilitating more loans in the economy. Conversely, if the discount rate is raised, borrowing becomes more expensive for banks, which can constrain the money supply and reduce the amount of loans available.

The other activities mentioned do not directly relate to the Federal Reserve's primary function to control the money supply in the same way. Increasing property taxes is primarily a local government function and does not directly influence the money supply controlled by the Federal Reserve. Regulating interest rates can refer to various types of interest rates in the economy, but it does not specifically denote one of the Fed's direct functions. Overseeing real estate transactions is not a function of the Federal Reserve; rather, it is a role of state regulatory bodies