Money and Banking

Mastering Money:

From Banking to Investing

What is Money?

• Medium of Exchange: money enables us to carry out trade and commerce easily, much easier than through bartering
• Standard of Value: money is a common standard of value that we can apply to all products
• Store of Value: money can hold its value overtime, as opposed to other objects that could expire

Multiple Choice

What is one of the functions of money?

• Medium of Exchange

• Unit of Account

• Store of Value

• Standard of Value

Money's Function:

• Medium of Exchange: Money is used to facilitate the exchange of goods and services.
• Unit of Account: Money provides a common measure for comparing the value of different goods and services.
• Store of Value: Money can be saved and used for future purchases.
• Standard of Value: Money serves as a benchmark for determining the worth of goods and services.

Mastering Money: Banking to Investing

• M1 Money (Now Money): includes coins, bills, and money in checking accounts
• M2 Money (Near Money): includes M1 Money and savings accounts, time deposits
• M3 Money (Broad Money): includes M1 and M2 Money and money market funds, CD accounts

Banks: financial institutions that deal with money. They offer services like deposits (checkable, savings, time), and loans (commercial, consumer, mortgage).

Multiple Choice

Which type of money includes coins, bills, and money in checking accounts?

• M1 Money

• M2 Money

• M3 Money

• Banks

M1 Money

M1 Money includes coins, bills, and money in checking accounts. It represents the most liquid form of money that is readily accessible for transactions. M1 Money is an important measure of the money supply and is used by economists to analyze the economy's liquidity and spending power.

Mastering Money: Saving and Investing

• Saving: Saving money helps us personally and contributes to economic growth. Banks use our savings to issue loans, stimulating the economy.
• Investing: Investing offers rewards and risks. Stocks represent ownership in a company, while bonds are loans to borrowers.
• Compounding: Compounding allows investments to generate earnings through compound interest, providing a steady return over time.

Multiple Choice

What is one benefit of saving money?

• It helps us personally and contributes to economic growth

• It offers rewards and risks

• It allows investments to generate earnings through compound interest

• It represents ownership in a company

Saving Money:

Trivia: Did you know that saving money not only helps us personally, but also contributes to economic growth? It allows investments to generate earnings through compound interest, which can lead to financial stability and prosperity for individuals and the economy as a whole. Start saving today and reap the benefits!

Types of Investments

• FDIC-Insured Bonds: Safest investment option, insured by FDIC up to $250,000.
• Corporate Bonds: Moderate risk, potential for higher returns.
• Stocks: Highest risk, but highest rates of return as a shareholder.
• Mutual Funds: Invest in a collection of securities managed by professionals for high profits with lower risk.

Multiple Choice

Which investment option is insured by FDIC up to $250,000?

• FDIC-Insured Bonds

• Corporate Bonds

• Stocks

• Mutual Funds

FDIC-Insured Bonds

Trivia: Did you know that FDIC stands for Federal Deposit Insurance Corporation? It is an independent agency of the United States government that protects depositors against the loss of their insured deposits if an FDIC-insured bank or savings association fails. FDIC-insured bonds are a safe investment option as they are backed by the full faith and credit of the United States government, providing up to $250,000 in insurance per depositor, per bank.