$ Money $
And other monetary assets
Money serves as a medium of exchange, a unit of account and a store of value. Although many objects
have served as money in the past, the coins and bills we use today meet the needs of modern society.
Money
Medium of exchange
Barter
Unit of account
Store of value
Currency
Commodity Money
Representative Money
Fiat Money
Answer the following questions about the green.
1. Describe three uses of money.
2. What are the six characteristics of money?
3. How does money serve as a store of value?
4. Give examples of :
a. Commodity money
b. Representative money
c. Fiat money
5. Why does United States currency have value?
6. What are disadvantages of commodity money?
7. Why did Continentals become worthless?
8. Would bobble heads or M&Ms make good money? How well do they meet each of the six
characteristics of an ideal currency?
9. What are bonds?
10. What are 3 components of bonds?
11. What are the advantages and disadvantages of a company or the government selling bonds?
Advantages
Disadvantages
The History of American Banking
The history of banking in the United States is the story of shifts between a centralized, national
banking system and independent state and local banks. Out of these shifts has developed the stable
banking system in which we place our confidence today.
Define the following
Bank
National Bank
Bank Run
Greenback
Gold Standard
Federal Reserve System
Central Bank
Member Bank
Federal Reserve Note
Great Depression
Federal Deposit
Insurance Corporation
(FDIC)
Answer the following
1. What was the purpose of the first Bank of the United States?
2. When was the first Bank of the United States formed by the Federalists?
3. What were three results of the National Banking Acts of 1863 and 1864?
4. What was the purpose of the FDIC?
5. How has the role of financial institutions changed over time?
6. What is the gold standard?
7. During the Free Banking Era, between 1837 and 1863, banking in the United States was
dominated by whom?
8. After the Civil War, the National Banking Acts gave the federal government the power to do
what?
9. As part of the nation’s recovery from the Great Depression of the 1930s, how was the banking
system reformed?
10. The savings and loan crisis in the late 20th century was caused at least partially by what?
Banking Today
Banking has changed greatly in recent decades. Today, many people are likely to use credit
or debit cards instead of cash or checks. Banks provide a large array of services, and
electronic banking is revolutionizing the way people conduct banking transactions.
Know the following terms
Money supply
Liquidity
Demand deposit
Money Market Mutual Fund
Fractional reserve banking
Default
Mortgage
Credit Card
Interest
Principle
Debit Card
Creditor
Answer the following questions
1. What does M1 represent?
2. What is M2?
3. What are 5 services a bank offers?
4. What are 4 types of financial institutions?
5. What is the difference between simply and compound interest?
6. The money supply of a country is made up of what?
7. Why are funds in checking accounts called demand deposits?
8. What is a credit union?
9. How does a bank make most of its profit on its business?