Question

When the Fed is acting as fiscal agent for the Treasury, it will

Select one:
a. buy securities from the Treasury, thereby providing the Treasury with money to pay the government's bills.
b. receive and process bids for Treasury securities in preparation for the Treasury's auction of securities.
c. serve as a lender of last resort.
d. supply the Treasury with paper money whenever the Treasury does not have enough funds to meet its bills.
e. supervise the Treasury by examining its books.

Answer 1

b. receive and process bids for Treasury securities in preparation for the Treasury's auction of securities.

Step-by-step explanation:

The Fed and their regional banks are authorized by the Federal Reserve Act of 1913 to act as fiscal agents if the Secretary of the Treasury requires them to do so. Theoretically, this shouldn't be a normal activity, it should only happen on demand of the Secretary of the Treasury.