Final answer:
The correct statement is that commercial banks are institutions that accept deposits, provide various payment services, and make loans. Fannie Mae and Freddie Mac are not commercial banks, and the Federal Reserve is the U.S. central bank but does not act as a commercial bank.
Step-by-step explanation:
The correct statement is D. Commercial banks are financial institutions that accept deposits, provide payment services, and make loans to firms and households. Fannie Mae and Freddie Mac are not commercial banks; they are government-sponsored enterprises aimed at supporting mortgage lending and homeownership. The Federal Reserve, meanwhile, is the U.S. central bank and does not act as a commercial bank, although it does provide many services to banks similar to those that banks provide to customers, such as maintaining accounts for them and processing checks. Additionally, the Fed has the authority to lend money to banks through the "discount window" and is responsible for supervising financial institutions, including bank holding companies.