Money and Banking Industry
By Megan Wetttein
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
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