Money and Banking Industry
- Money is a current medium of exchange in the form of coins and banknotes.
- Money is used in 3 ways: a medium of exchange, a measure of value, and a store of value.
- Money has 6 characteristics: portable, durability, divisibility, limited supply, uniformity, acceptability.
- The sources of money's value are Commodity Money, Representative Money, and Fiat Money.
- The United States uses Fiat Money.
HISTORY OF BANKING
- The First Bank of the United States, created in 1791, was part of a three-part expansion of federal fiscal and monetary power to stabilize and improve the nation's credit and to improve handling of the financial business of the United States government.
- The banking industry exploded, and everyone went back to using their own charter.
- The Federal Reserve is the central bank of the United States and is there to provide the nation with a safer, more flexible, and more stable monetary and financial system.
- The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation operating as an independent agency created by the Banking Act of 1933.
- Economist measure the U.S. money supple with M1 and M2.
- The current U.S. money supply is 4028362.00.
- Banks protect money and pay interest back.
- Banks make a profit because they collect more interest than they pay to savers.
- The different financial institutions are: Commercial Banks, credit Unions, Stock Brokerage Firms, Asset Management Firms, Insurance Companies, Fonance Companies, Building Societies, and Retailers.
- Electronic banking has made it easier to use and access our money but has also made it safer.