Question

Identify the three ways that the Federal Reserve serves government.

Column A
1.
Federal Government’s Banker:
Federal Government’s Banker
2.
Government Financial Advisor:
Government Financial Advisor
3.
Issuing Currency:
Issuing Currency
Column B
a. maintains a checking account for the Treasury Department and processes payments such as social security checks and IRS refunds.
b. The district Federal Reserve Banks are responsible for issuing paper currency
c. The Fed sells, transfers, and redeems government securities.

Answer 1

The three ways that the Federal Reserve serves the government are matched as follows:

1. **Federal Government’s Banker**:
**a.** maintains a checking account for the Treasury Department and processes payments such as social security checks and IRS refunds.

2. **Government Financial Advisor**:
**c.** The Fed sells, transfers, and redeems government securities.

3. **Issuing Currency**:
**b.** The district Federal Reserve Banks are responsible for issuing paper currency.