On November 16, 1914, the Federal Reserve Bank of the United States officially opened for business. The Fed, as it is known, is the central bank of the entire United States. It determines U.S. monetary policy through three key objectives: maximum employment, stable prices, and moderate long-term interest rates.
 
The Fed’s main responsibility is to keep inflation low. Inflation is an increase in price of goods and services. The Fed is also responsible for controlling the money supply in the United States. The Fed controls the money supply by buying and selling U.S. Treasury securities. Treasury securities, often called Treasuries, are loans people and businesses make to the United States. The government uses Treasuries to create programs used by Americans, such as disaster relief or the federal highway system. The government pays back Treasuries after a certain period of time.
 
There are actually 12 Federal Reserve Banks, one for every district in the system. The Fed identifies districts by number, letter, and the city where the district’s Reserve Bank is located.
 
1.  Boston, Mass. (A)
2.  New York, N.Y. (B)
3.  Philadelphia, Pa. (C)
4.  Cleveland, Ohio (D)
5.  Richmond, Va. (E)
6.  Atlanta, Ga. (F)
7.  Chicago, Ill. (G)
8.  St. Louis, Mo. (H)
9.  Minneapolis, Minn. (I)
10. Kansas City, Mo. (J)
11. Dallas, Texas (K)
12. San Francisco, Calif. (L)
bank
Noun

organization that loans, protects, and exchanges money to and from individuals and organizations.

determine
Verb

to decide.

disaster relief
Noun

goods, services, or funds supplied to government groups, organizations, or individuals following a natural or manmade disaster that prevents the normal functioning of society.

employment
Noun

job or work.

federal
Adjective

having to do with a nation's government (as opposed to local or regional government).

Federal Reserve
Noun

central bank of the United States. Also called the Fed.

government
Noun

system or order of a nation, state, or other political unit.

highway
Noun

large public road.

increase
Verb

to add or become larger.

inflation
Noun

increase in the price of goods and services.

interest rate
Noun

amount of money a lender charges a customer for a loan.

loan
Noun

money, goods, or services given to a person or organization with the intention that the person or organization will return it.

maximum
Adjective

the most or greatest amount possible.

moderate
Adjective

of medium quality or quantity, not extreme.

monetary
Adjective

having to do with money or currency.

objective
Noun

goal or aim.

responsible
Adjective

having accountability, authority, or liability in a situation.

stable
Adjective

steady and reliable.

treasuries
Noun

loans people and businesses make to the U.S. government. Also called Treasury securities.