Items in the process of collection are generated by
A)open market operations.
B)discount loans.
C)the Fed's check-clearing role.
D)spending by the Treasury from its Fed accounts.

Question

Quizplus · Accepted Answer

The Fed's check-clearing role generates items in the process of collection. When checks are deposited in banks, the funds are not immediately transferred to the account of the person or business receiving the payment. Instead, the checks go through a clearing process facilitated by the Federal Reserve. During this process, the Fed collects the funds from the bank that the check was drawn on and delivers them to the bank where the check was deposited. The funds are considered "in the process of collection" during this time.

Items in the Process of Collection Are Generated by