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The
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Word Bank
bank account
banks
interest rates
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money
currency
Federal Reserve
A “note” is an I.O.U. Paper
money in the U.S. is referred to
as Federal Reserve Notes. That
means the Fed owes you $1 in
exchange for this bill.
Click the coins to take a
virtual tour of the U.S. Mint:
Do they make $10,000 bills?
Click Ben Franklin to find out:
If you kept going,
you’d find out
that Mary’s $100
will add $1,000
to the money
supply.
Click to watch a video about the
Federal Reserve:
When I was a
kid, candy bars
cost 5 cents!
Ever heard anyone say
something like this?
Inflation makes prices
go up over time.
Think about something
you bought recently.
How much did you
pay? How much might
it have cost years ago?
Click the calculator to access
the inflation calculator at
the U.S. Bureau of Labor
Statistics:
Click to view Hands On Banking’s
tutorial about credit:
Click for
Financial
Literacy
Videos
1) Can you exchange
money for goods and
services?
 Yes
No
Money is the “medium of exchange” that people
use to pay for things.
2) Does “money” ONLY
refer to currency?
Yes
 No
Money includes currency and bank account
balances, which can be turned into currency.
3) Can you make
unlimited withdrawals
from a savings account?
Yes
 No
Federal law limits the number of certain kinds of
withdrawals you can make each month.
4) Is it safe to keep your
money in the bank?
 Yes
No
The federal government insures bank deposits up
to a certain amount of money.
5) Do banks pay people
more for savings
accounts than they
charge for loans?
Yes
 No
Savings accounts pay a TINY amount of interest.
Interest you pay on loans is much higher.
6) Could most people
start a business without
a loan?
Yes
 No
Starting a business can be expensive. Loans
provide money for equipment and startup costs.
7) Does lending make
more money available to
spend?
 Yes
No
Lending actually multiplies the amount of money
out in the community.
8) Are banks required to
keep some money in
reserve?
 Yes
No
Banks must keep a certain percent of deposits in
reserve.
9) Does anyone supervise
the banking industry?
 Yes
No
The Federal Reserve and other federal agencies
supervise the banking industry.
10) Does the Fed want
the economy to swing
wildly up and down?
Yes
 No
The Fed’s goal is to keep the economy in balance.
11) Does increased
lending make the
economy slow down?
Yes
 No
Increased lending = more spending, which helps
fire up the economy.
12) Do some loans help
you increase your ability
to produce?
 Yes
No
A loan to start or expand a business, or a loan to
get an education, can help you earn more.
13) Is an entrepreneur
likely to start his or her
own business?
 Yes
No
“Entrepreneurs” take risks to start new businesses.
14) Does paying for
something with a loan
cost less than paying for
it outright?
Yes
 No
Paying with a loan always costs MORE than
paying for something outright!
15) Does anyone keep
track of your credit
history?
 Yes
No
Lenders report your credit history to the three
credit reporting bureaus.