What is Money? Chapter 24.1
Essential Idea:
1. Money has three different _________________.
2. First, money serves as a _________ (or form) of _________________.
a. We trade money for _______________________________ in return.
b. Without money, we would have to ___________________, which means
we’d have to trade goods and services for other _____________________.
i. When have you bartered?
3. Second, money serves as a ___________ of ____________.
a. This means we can ________ our wealth in the form of money until
_____________________________.
4. Third, money serves as a measure of ________________.
a. Money is like a _________________________.
b. If we say something is worth $10, _________________ knows what it’s
worth.
5. The two types of money are _________ and _______________.
a. __________ are metallic forms of money such as __________ or
__________.
b. _______________ includes both coins and _____________________.
6. What gives money value?
a. Money has value because we are absolutely sure that
____________________ will accept its ____________.
b. If everyone decided $100 bills were worthless, they would become
_________________.
c. We have to have __________________ in our money.
d. Money by itself has little __________ or ________. Money only costs
_______________ to make.
7. People save money in __________. Does the money stay in the bank? ________
a. Banks use the money by ______________ it to other people or businesses.
The banks make more money by charging ____________.
b. ______________ is a fee for a loan. If you loaned _____________ at
_____ interest, the person would have to pay you back ___________, and
you would make a _____________.
8. How safe is your money in the banks? ___________
a. Why? Because of ________________ regulation and _______________.
b. If a bank fails even with the help of government regulation, the
________________________________, or _________, will insure your
personal account up to ________________. This way, if the banks
________, you don’t lose all of your _____________ like people did
during the _____________________.
The Federal Reserve System, Chapter 24.2
Essential Idea:
1. The ____________________ of the United States is called
the_____________________________________________, also known as the
_______.
2. When _________ need money, they borrow from _________.
3. The United States is dividing into ______ Federal Reserve districts.
4. Thousands of banks are members of the Fed and own the Fed because they own
_________ in it. The Fed pays member banks _______________.
5. To keep member banks from having too much ______________, the law requires
it to be run by a _________________________, who are appointed by the
_____________ and the ______________.
6. The president selects one of these members to be the _______________.
a. Who is the Chairman of the Fed today?
7. The Fed gets advice from several _____________________, who report on
_________________, ______________________, and ___________________.
8. The FOMC (____________________________________________) are within
the Fed and ______________ the ______________________.
Functions of the Fed:
a. ___________________
i. The Fed ___________________ large ________________ banks.
1. It can allow or block a bank ________________.
2. It regulates connections between _____________ and
____________ banks.
3. Enforces laws dealing with ________________________.
a. Did the Fed do a good job regulating mortgage
loans?
b. ____________________________
i. The Fed holds the government’s ________________.
ii. The Fed sells U.S. government __________.
iii. The Fed manages the nation’s ___________.
c. _______________________________
i. Monetary policy is the controlling of the ___________ of money
and the _________ of borrowing money.
ii. Monetary policy is used to _______________ or
_______________ economic growth.
Tools of Monetary Policy
1. _______________________ is the amount of interest the Fed charges banks to borrow
money.
2. _______________________ is the amount of money the banks are required to keep in
Federal Reserve banks.
3. ________________________________ includes buying and selling government
bonds.
What if the economy is growing too fast?
1. If the economy is growing too fast, the Fed wants to slow it down by
______________ the money supply.
a. ______________ the discount rate makes banks want to borrow
___________ and makes them offer _________ loans to costumers.
b. _______________ the reserve requirement gives the banks
__________ money available to ________ to customers.
c. ______________ government bonds means that people will have
________ money to spend.
What if the economy is growing too slowly?
1. If the economy is growing too slowly, the Fed wants to stimulate it by
_______________ the money supply.
a. ______________ the discount rate makes banks want to borrow
___________ and makes them offer _________ loans to costumers.
b. _______________ the reserve requirement gives the banks
__________ money available to ________ to customers.
c. ______________ government bonds means that people will have
________ money to spend.