Money and Banking Industry

By Megan Wetttein

Money

What is money?

-A current medium of exchange in the form of coins and banknotes; coins and banknotes collectively.

What are the three uses of money?

-Medium of exchange, unit of account, store of value

What are the 6 characteristics of money?

-Durability, Portability, Divisibility, Uniformity, limited supply, & acceptability

What are the sources of money's value

-Faith in currency, market liquidity, & interest rates

What is the source of value for the money in the United States economy?

-Purchasing power

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History of Banking

What was the role of the First Bank of the United States created in 1791?

- Improved national credit, was seen as necessary

What happened in 1832 when the Bank of 1811 lost its charter?

- Andrew Jackson vetoed the charter bill

What is the Federal Reserve? What is the role of the Federal Reserve today?

- Central banking system of the United States

What is FDIC and when and why was it created?

- Provide stability to the economy

Banking Today

How do economists measure the U.S. money supply?

- M1 & M2

What is the current U.S. money supply?

-4023862

What services do banks provide?

- checking accounts, saving accounts, loans, and deposits

How do banks make a profit? (Explain and create or find an illustration)

- interest on loans

What are the different types of financial institutions?

- despository and contractual

How has electronic banking affected the banking world?

- speeds up the process