The correct statement is:
C. The Board of Governors set the target federal funds rate and overlook the banking industry while the Federal Reserve district banks implement the policies from the Board of Governors.
This accurately describes the relationship between the Board of Governors and the Federal Reserve district banks. The Board of Governors is responsible for directing monetary policy and overseeing the overall operation of the Federal Reserve System, which includes setting key interest rates. The district banks play a crucial role in implementing these policies and providing services to commercial banks and the federal government.