The Federal Reserve has a new website for kids (http://federalreserve.gov/kids). Although most kids won’t have an interest in the website, it is still a pretty good resource for answering these questions:
Then, after they have read all the sections, there’s a QUIZ to test their knowledge of the Federal Reserve System. Master this, and they will be the life of the next cocktail party. I’ll TRY to get my boys to go through the website and report back to you what their thoughts were.
There’s also a really nice website for older kids and teachers.