ECON Money, Banking, Fed Notes

8/13/2019 ECON Money, Banking, Fed Notes

1/13

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You think you know what it is, right? Its that cold, hard cash in your,/01$2 that paper with presidents faces on it, those coins that say epluribus unum. But money is more than just that. 52#*4 is a medium ofexchange, which means its what is commonly accepted in exchange for+//(3 "*( 3$45)0$3- 6/*$7 "83/ 3$23 " 0/##/* 32"*("4( /9 5"8:$ "#/*+,$/,8$ )* " 0/:*247- ;"2 " (/88"4 )3? 4)+>2@A

6/*$7 )*08:($3 0/)*3 "*( */2$3 ,4)*2$( B7 2>$ +/5$4*#$*2? =>)0> "4$0"88$( 16))*#147 C:2 )2 "83/ )*08:($3 2>)*+3 2>"2 0"* B$ $"3)87 0>"*+$( )*2/0:44$*07? 3:0> "3 " ($,/3)2 )* " B"*1 "00/:*2- D>)*1 /9 )2 2>)3 ="7% E>$*people say I dont have any money, they dont just mean they arentcarrying any cash. Usually they mean they also dont have a positive bank"00/:*2 B"8"*0$ 2>"2 2>$7 0/:8( 2:4* )*2/ 0"3>-

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Most of the time, when you hear bank you think account. Bank

"00/:*23 "4$ "* )#,/42"*2 3$45)0$ 2>"2 B"*13 ,4/5)($- E>$* 7/: >"5$ "B"*1 "00/:*2? 7/: #"1$ +*92%,-% B7 ,:22)*+ 7/:4 #/*$7 )* 2>$ B"*1?"*( 7/: $F,$02 2/ B$ "B8$ 2/ :,-/+)": 7/:4 #/*$7 /:2 /9 2>$ B"*1=>$*$5$4 7/: ="*2 2/-

E)2> " 1/*1$,#; "1126#- ? 7/: ($,/3)2 7/:4 #/*$7 )*2/ 2>$ B"*1 =)2>2>$ $F,$02"2)/* 2>"2 7/: =)88 B$ ($,/3)2)*+ "*( =)2>(4"=)*+ #/*$7 94/#2>$ "00/:*2 /92$*- G/: +$2 ,",$4 1/*1$% 2>"2 8$2 7/: 24"*39$4 7/:4 #/*$72/ /2>$4 ,$/,8$- !/4#"887 7/: "83/ +$2 " ,8"32)0 +*$ 0"4( )* " 32/4$ /4entering the card number online. Its called a debit card because it ($B)23 ?/4 =)2>(4"=3? #/*$7 94/# 7/:4 "00/:*2- H$B)2 0"4(3 "83/ 8$2 7/: :3$ ID6#"0>)*$3 2/ =)2>(4"= #/*$7 94/# 7/:4 "00/:*2-

E)2> " %"=,#;% "1126#- ? 7/: ($,/3)2 7/:4 #/*$7 )*2/ 2>$ B"*1 =)2>the expectation that you will make limited withdrawals. (Theres a reasonwhy its called a savings account.) In fact, federal regulations limit thetype and number of withdrawals youre allowed to make each monthfrom a savings account. But theres a benefit: The bank actually pays you2/ 1$$, #/*$7 )* " 3"5)*+3 "00/:*2- D>$ $F24" #/*$7 7/: $"4* /* "savings account is very low, though, so dont expect to get rich that way.

J",$4 0>$013 "4$ :3$( 8$33 /92$**/= 2>"2 ,$/,8$ >"5$ ($B)2 0"4(3"*( ,"7 B)883 /*8)*$-

I:2/#"2)0 2$88$4 #"0>)*$3 ;ID63A#"1$ )2 $"37 2/ 2:4* #/*$7 32/4$()* " B"*1 "00/:*2 )*2/ 0"3>- C)883"*( 0/)*3 #"1$ :, /*87 KL /9 2>$#/*$7 )* 0)40:8"2)/* )* 2>$ M-N-O"* 7/: $F,8")* =>7@

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P"5$ 7/: $5$4 24)$( 2/ )#"+)*$ " =/48( =)2>/:2 #/*$7@ Q)5$ )2 "247- R1"7? (/*$@ P/= ()( )2 +/@ $ 9"024$#")*3% D>$ =/48( 4:*3 /* #/*$7- E$ "88 :3$ )2 2/ ,"7 9/4 2>$2>)*+3 =$ *$$( "*( ="*2- N/ =>"2 )3 #/*$7? "*( =>$4$ (/$3 )20/#$ 94/#@ E>"2 4/8$ (/ B"*13 ,8"7@ I*( (/ 7/: 4$"887 *$$(money? Cant you just use credit instead? Its time to find out.


2/13

What is the difference between MONEY and CURRENCY?

Money is: ___________________________________________________________________

Currency is: _________________________________________________________________

How Much Money is there on Earth?http://youtu.be/w2tKg3E53DM

= ____________________________

= ____________________________

= ____________________________

= ____________________________
http://youtu.be/w2tKg3E53DMmailto:[email protected]


3/13

Types of Money

Which type of money is the US Dollar? ___________________________________________

6(//(7'&-+($,-

8,54,),$&2&'9,+($,-

"'2&+($,-

Value is based on: Value is based on: Value is based on:

An example is: An example is: An example is:

Pros: Pros: Pros:

Cons: Cons Cons:


4/13

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5/13

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6/13

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7/13

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/"01$ 023 4"5 67"6 87")* 29 :2"*4 2* 67$ :"46 ,"+$ "*( 52*($;$( 725 "::that money could be created out of thin air. Maybe youre thinking, Buttheres nothing 1$7)*( that money. Just Marys $100! So why doesnt the572:$ 4046$# 2";( 29 N2A$;*2;4 2A$;4$$4 67$4$ 1"*?4- D$($;": '$4$;A$ >"*?4dont deal with the public. They are bankers banks.

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8/13

The Fed

FED = _______________ ________________ ________________.

It is the ___________________ _______________ of the United States of America. #Murkah

It is made up of __________________ district banks and is run by a _______________ ____

_________________________ who are appointed by the President and conrmed by the

______________.

The Fed has 5 major functions:

1. Regulate/Supervise/Communicate:

2. Loan money to regular banks:

3. Sell Government Securities (Investments):

4. Manage Currency:

5. Pay the Governments Bills:


9/13

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A loan always costs more than paying for something outright. Thatsbecause banks wont lend money for free. You have to pay back the"#/0*1 /2 13$ 4/"* ,405 )*1$6$51 - 7*1$6$51 8"* "(( 0, 1/ " 4/1 /2 #/*$9/:$6 1)#$- ;/#$1)#$5 ,$/,4$ 1")44 #"3"1 13$9 "6$ =09)*+ 13"*13$9 >)44 ,"9 )* )*1$6$51 /* 13$ 4/"*- 7* 13"1 8"5$? 13$ =/66/>$6 5$$5 13$4/"* "5 "* ,#9*%-3*#- #/*$9 5,$*1 )* /6($6 1/ #")13 " 4/"*- I$3)84$5 ($86$"5$ )* :"40$ :$69 J0)8)13a loan almost always means youre paying more than the car is worth. Butmost people dont have any choice. Vacations are an example of the otherextreme. Once a vacation is over, all thats left is a memory. There are lotsof great reasons to take a vacation, but if youve paid for it with a loan, you8/04( $*( 0, ,"9)*+ 13$ =)44 "*( 13$ )*1$6$51 2/6 " 4/*+ 1)#$-

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11/13!"#$%&''( *+,

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ECON Money, Banking, Fed Notes

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