Which of the following entities serves as a seller or borrower of bonds?

The federal government serves as a seller or borrower of bonds primarily through the issuance of Treasury securities, including Treasury bills, notes, and bonds. When the government needs to finance its operations, cover budget deficits, or undertake various public projects, it issues bonds to raise funds. Investors buy these bonds, essentially lending money to the government in exchange for periodic interest payments and the return of the bond's face value at maturity. This mechanism helps the government fund its activities and manage its financial obligations.

In contrasting contexts, individuals and pension funds generally function as buyers of bonds rather than sellers, though they may hold and trade bonds in secondary markets. Mutual funds may also invest in bonds on behalf of their investors, but they do not issue government bonds themselves. Thus, the role of the federal government as a borrower of bonds is distinct and central to understanding the functioning of the bond market.