Question

Providing a system of check collection and clearing for depository institutions _________ (is/is not) a duty of the Federal Reserve

a) Is
b) Is not
c) May be
d) Depends on circumstances

Answer 1

Providing a system of check collection and clearing for depository institutions is a duty of the Federal Reserve. The correct option is (a).

Step-by-step explanation:

Providing a system of check collection and clearing for depository institutions is a duty of the Federal Reserve.

When individuals write checks to make payments, the Federal Reserve plays a crucial role in ensuring that these checks are processed and funds are transferred from one account to another.

For example, when you write a check to buy groceries, the grocery store's bank sends the physical check or an image of it to your bank. Then, your bank transfers funds from your account to the grocery store's account.

The Federal Reserve is responsible for overseeing and facilitating this entire process, ensuring the smooth functioning of the payments system.