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Simple English definitions for legal terms
federal reserve note
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A quick definition of federal reserve note:
Federal Reserve Note: The paper money used in the United States is called a Federal Reserve Note. It is issued by the Federal Reserve Banks and comes in different amounts like $1, $5, $10, $20, $50, and $100. These notes are like promises to pay the person who has them, and they can be exchanged for goods and services. They do not earn any interest and can be used to buy things whenever needed.
A more thorough explanation:
A Federal Reserve Note is a type of paper currency used in the United States. It is issued by the Federal Reserve Banks and is a non-interest-bearing promissory note payable to the bearer on demand. These notes come in different denominations ranging from $1 to $10,000.
- A $20 bill in your wallet is a Federal Reserve Note.
- If you go to the bank and exchange your $100 bill for five $20 bills, you are receiving five Federal Reserve Notes.
These examples illustrate how Federal Reserve Notes are used in everyday transactions. People use them to buy goods and services, and banks use them to make change or give out cash to customers.