When the federal government makes a purchase
A)the Fed writes a check for the amount.
B)the Treasury writes a check drawn on one of its accounts at commercial banks.
C)the Treasury writes a check drawn on its account at the Fed.
D)the Office of the Purchaser General writes a check drawn on its account with the Treasury.

Question

Quizplus · Accepted Answer

When the federal government makes a purchase, the Treasury writes a check drawn on its account at the Fed. This account is known as the Treasury's general account, which serves as the primary checking account for the U.S. government. The Fed acts as the government's banker and maintains this account, which is funded through various sources such as tax revenues and borrowing.

When the Federal Government Makes a Purchase