Federal Reserve Notes Flashcards, test questions and answers

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What is Federal Reserve Notes?

The Federal Reserve Note is the legal tender of the United States and is issued by the Federal Reserve Banks. The notes are commonly known as dollar bills and they are used to make purchases, pay debts, and store value. The notes come in denominations of $1, $2, $5, $10, $20, $50 and $100. The Federal Reserve Note was created after the passage of The Federal Reserve Act in 1913. This Act authorized the creation of a central bank to act as a lender of last resort for banks during times of economic disruption or crisis. Since then, it has become an essential part of our nation’s financial system and its currency has been used to facilitate financial transactions between individuals and businesses all over the world. The front side of a Federal Reserve note features a portrait or vignette related to American history or culture including former presidents such as George Washington, Thomas Jefferson and Abraham Lincoln historical figures such as Benjamin Franklin famous landmarks like Independence Hall monuments like Mount Rushmore statesmen like Alexander Hamilton inventors like Eli Whitney natural wonders like Yellowstone National Park athletes like Jackie Robinson athletes like Jackie Robinson etc. The back side contains intricate designs that portray various aspects of American life such as farming scenes from rural communities across America or images that celebrate technological innovation in our country’s history. In order to maintain circulation stability within our economy, the U.S Department of Treasury requires that all new currency be issued into circulation at face value which helps keep inflation under control. Additionally, each Federal Reserve note is also printed with unique identifiers such as serial numbers which helps banks distinguish genuine notes from counterfeit ones when processing payments from customers who use cash for their purchases.