How many district banks comprise the Federal Reserve System?

The correct answer is 12 because the Federal Reserve System consists of twelve regional district banks that serve as the operating arms of the Federal Reserve. These banks are located in major cities across the United States, each serving its region by implementing monetary policy, supervising and regulating banks, and providing financial services. This structure allows the Federal Reserve to address the diverse economic conditions in different areas of the country effectively.

The twelve district banks work together with the Federal Reserve Board of Governors to form a comprehensive and balanced approach to national monetary policy. Each district bank has its own president and board of directors, tailored to meet the needs of their districts while contributing to national policy-making.

The other options do not align with the established structure of the Federal Reserve. There are not ten, fourteen, or fifteen district banks in the Federal Reserve System, which is a fundamental aspect of its organization and operation.