Money, Banking, and Investing

Chapter 14: Money, Banking, and The Fed

Draw

How are you doing today?

Open Ended

What bank do you/your family use for your financial needs?

Poll

When you want to get a loan to buy a house or car, do you only pay back the amount you borrowed?

• Yes

• No

Functions of Money

• Medium of Exchange: An accepted

form of payment for goods and
services

• Standard of value: Used to measure

worth of goods/services

• Store of value: Consumers can save

money to use later; money will keep its
value

Multiple Choice

Martin buys a new pair of Vans sneakers and spends $65. Which function of money helps him understand the cost of the shoes?

• Medium of exchange

• Standard of value

• Store of value

Multiple Choice

Vanessa used Apple Pay to pay for her recent haircut. Which function of money allowed Vanessa to use this form of payment?

• Medium of exchange

• Standard of value

• Store of value

Multiple Choice

Felipe has saved $500 from his job and wants to save all of it for at least one year. Which function of money allows for him to do this?

• Medium of exchange

• Standard of value

• Store of value

What is the Federal Reserve?

● The Federal Reserve is the central

bank of the United States

Goals of the Federal Reserve

*Please

write
this in
your

notes!*

Federal Reserve System Structure

12 Reserve Banks

Federal Reserve Banks

• Distribute the

nation’s currency
and coins

• Serve as banker

for the U.S.
Treasury

Monetary Policy

•

Controlling the growth of the money
supply

1. Tight/Contractionary monetary policy:
Decreases the money supply
•

Less money means less spending
and less inflation → can lead to
contraction

2. Loose/Expansionary monetary policy:
Increases the money supply
• More money means more spending and

expansion → can lead to inflation