Question

When commercial banks need more Federal Reserve Notes, Question 16 options: they call the Bureau of Engraving and Printing, which delivers the requested amount. they call the Board of Governors of the Fed, which delivers the requested amount. they ask their customers to exchange their Federal Reserve Notes for U.S. Treasury securities. they call the Treasury, which delivers the requested amount. they call their Federal Reserve District Bank, which delivers the requested amount.

Answer 1

Answer:

they call their Federal Reserve District Bank, which delivers the requested amount.

Explanation:

The Federal Reserve System (popularly referred to as the 'Fed') was created by the Federal Reserve Act, passed by the U.S Congress on the 23rd of December, 1913. The Fed began operations in 1914 and just like all central banks, the Federal Reserve is a United States government agency.

Generally, it comprises of twelve (12) Federal Reserve Bank regionally across the United States of America, which are commonly referred to as Federal Reserve District Bank.

The Fed provides banking services to all the commercial banks in the country because the Federal Reserve is the "lender of last resort."

Hence, when commercial banks such as the regular banks in societies need more Federal Reserve Notes, they call their Federal Reserve District Bank to deliver the requested amount to them.

Additionally, currency in circulation includes all of the US paper currency (dollar bill) that are available in the country while reserves refers to the minimum deposits being held for the U.S Treasury and depository financial institutions by the Fed.