US Money Supply
What does it mean that money should be divisible?
It should be able to be divided into parts
Name three financial institutions that you have seen in your community.
Wells Fargo, Bank of America, Virginia Credit Union, SunTrust & BB& T(merged now called Triuist Call), Wood Forest, Federal Credit Union, Argent Credit Union--not limited to this list.
How many Federal Reserve Banks are there in the US?
12
What is the monetary system?
Goods and services are indirectly exchanged using money which then can be exchanged for other goods and services.
Who is Jerome Powell?
What are the three functions of money?
Medium of exchange, measure of value, store of value
Define financial institution.
Organization for managing your money in our community.
Name 2 of the 6 functions of the federal reserve.
Supplies the economy with cash
Processes checks and electronic transfer of funds
Holds reserves for depository institution
Serves as banker to the federal government
Supervises and regulates banking institutions
Regulates the money supply
What is money?
Can be anything that people accept as a standard of payment.
Name two types of financial institutions.
Acceptable Answers: banks, credit unions, savings and loan associations, insurance companies, brokerage firms, finance companies.
What is included in M1?
Currency, checks, demand deposits and traveler's checks.
Define bank account.
Is a record of how much money a customer has put in to or taken out of a bank.
What year did Congress set up the Federal Reserve System?
1913
What is EFT? Explain your answer.
Electronic Funds Transfer--Money is transferred from one account to another through a network of computers.
Is a credit union for profit or not?
Credit union are NOT for profit. They offer rewards, perks, benefits to their members.
What is included in the M2?
consists of M1 (currency held by the public plus checkable deposits) plus savings deposits, money market mutual funds, and small time deposits.
Define interest.
Is the rate that the bank pays you for keeping your money.
What is the primary responsibility of the Federal Reserve System?
Responsible for controlling the amount of money in circulation.
What is a mortgage?
Is a deed to give to the lender the property if the loans is not paid back.
Is a bank for profit or not?
Yes, a bank (full-service/commercial) is for profit. Banks are in business to make money. It's all about the Benjamin's!
What are the six characteristics of money?
stable
scarce
durable
divisible into parts
portable
accepted
Define collateral and give two examples.
Is something valuable you put up for a loan. Examples (car, coin collection, property, house).
Who is the chair of the Federal Reserve System?
Jerome Powell
What is the Federal Reserve System?
What is the bank's primary source of income?
Loans.