2.  All 50 states are listed across the top of the Lincoln Memorial on the back of a $5 Bill

3.  What is money made from?

4.  Money is made of:  25% linen  75% cotton

5.  When was the first paper currency issued in the United States?

6.  In 1862 the government first issued paper currency as a result of the shortage of coins during the Civil War

7.  What was the smallest bill ever in circulation?

8.  America once issued a 5 cent bill during the Civil War

9.  What was the largest bill ever in circulation?

10.  The largest denomination of currency ever printed in the United States was a $100,000 Series 1934 Gold Certificate note

11.  What is currently the largest bill in circulation?

12.  Although the $100,000 is no longer in circulation, you may still come across the $5,000 bill

13.  Or the $10,000 bill

14.  When calling coin flip, which side should you choose?

15.  If you toss a penny 10,000 times, it will land on tails 51% of the time  The heads picture weighs more, so it ends up on the bottom  So always pick tails, you have a slightly better chance

16.  How much does it cost to make a bill?

17.  A dollar bill costs about 3 cents to make

18.  Where did the dollar symbol come from?  It’s from the Spanish dollar sign  The US decided in 1782 that its basic unit of currency would be the Spanish dollar or peso  Its symbol was even then written as $, which was supposedly an ancient Phoenician sign indicating strength and sovereignty

19.  How long do bills generally stay in circulation?  $1 bill - 18 months  $5 bill - 2 years  $10 bill – 3 years  $20 bill – 4 years  $50 and $100 bills - 9 years

20.  Smaller bills are used more often than larger bills, and as a result get worn out more quickly

21.  Who was the only woman to ever appear on U.S. bill?

22.  Martha Washington is the only woman whose portrait has appeared on a U.S. currency note

23.  How much of the currency in circulation is counterfeit?

24.  There is about 405 billion dollars in circulation  Only 32 million of that amount is counterfeit  That means, the percentage of counterfeit money in America is.0079%  $20 bills are the bills that are most often counterfeited

25.  If you had 10 billion $1 bills, how long would it take you to spend it?

26.  If you had 10 billion $1 bills and spent one every second of every day……  It would require 317 years for you to go broke

27.  Pass Out History of Money  Read Together and Go Over

28.  3 Basic Functions of Currency  To act as a Medium Exchange  To act as a Unit of Account  To act as a Store of Value

29.  1.) Medium of Exchange  Is anything used as an intermediary in the exchange of goods and services  The medium of exchange in most countries is some form of paper money  The old way of exchanging goods and services was done through the Barter System

30.  Barter System  The direct exchange of one set of goods or services for another  The barter system depends on the “coincidence of wants,” which is a very inefficient way to exchange goods and services

31.  2.) Unit of Account  Acts as a means for comparing the values of goods and services  Using paper money as a unit of account allows for unrelated goods and services to be compared fairly

32.  3.) Store of Value  Serves as something that keeps its value over time regardless of whether it is used now or at some later date  If you were to receive a good in exchange for something, that good may not retain its current value over time; a currency with a store of value would

33.  6 Characteristics of a Good Currency  1.) Durability  2.) Portability  3.) Divisibility  4.) Uniformity  5.) Limited Supply  6.) Acceptability

34.  Durability  The currency must be able to withstand the wear and tear that comes from being used over and over again

35.  Portability  The currency must be easily transferred from one person to another

36.  Divisibility  The currency must be easily divided into smaller denominations

37.  Uniformity  The value of currency and its purchasing power must be relatively the same

38.  Limited Supply  There must be control over the supply of the currency in order for it to retain its value  In the U.S. the Federal Reserve System controls the flow of money

39.  Acceptability  Everyone in an economy must accept the currency as a form of payment

40.  Commodity Money  Objects that have an intrinsic value  For Example: Gold, Silver, or Diamonds  Has Durability, Lacks Portability

41.  Representative Money  Objects that have value because the holder can exchange them for something else of value  Representative money lacks uniformity and acceptability  For Example: Gift Certificates or Gift Card

42.  Fiat Money  Money that has no intrinsic value, but rather has value because a government has ordered that it is an acceptable means to pay debt  Control of supply is essential for a Fiat System to work  The Federal Reserve controls the money supply in the United States  Example of Fiat Money: U.S. Currency or Euro

43.  Money Supply  Is the total of everyone’s coins, paper money, money in the bank, and checks in an entire nation  Federal Reserve System  Is the central banking system in the United States  The role of the Fed is to conduct the nation's monetary policy, supervise and regulate banking institutions, and maintain the stability of our financial system  The Fed is responsible for the printing of money in the United States

44.  The Gold Standard  Gold was a common form of currency due to its rarity, durability, and divisibility  It was used as way for nation’s to back the printing of their paper money  The amount of gold a nation held determined the value of the paper money they printed  Following WWII, the Gold Standard was replaced, and the U.S. dollar became the universal currency of comparison for the rest of the paper money in the world

45.  Inflation  A term used to describe a rise in the general price levels of goods and services in an economy over a period of time  When the general price level rises, each unit of currency buys fewer goods and services, making that currency less valuable  Causes of Inflation  1.)A government printing excess money to deal with a crisis  2.)A rise in production costs, which leads to an increase in the price of the final product

46.  Deflation  The term used to describe a fall in the general price levels of goods and services in an economy over a period of time  When the general price level falls, each unit of currency buys more goods and services, making that currency more valuable  Causes of Deflation  1.)An increase in the total number of competitors in a market increases the supply of goods, which decreases the price of those goods  2.)Decrease in the money supply (ex. Fewer loans from banks) causes a decrease in the demand for products

47.  Currency Exchange Rates  Specifies how much one currency is worth in in comparison to another currency  All foreign exchange rates are compared to the U.S. Dollar, making the U.S. dollar the new Gold Standard

48.  What causes the value of currency to change?  A currency will tend to become more valuable whenever demand for it is greater than the available supply  It will become less valuable whenever demand is less than available supply  The demand for money is directly related to a country's level of business activity, gross domestic product (GDP), and employment levels  The higher each one of those categories are, the more valuable a nation’s currency will be

49.  Types of Currency  United States – U.S. Dollar - $1  Russia – Russian Ruble – 30.4  China – Yuan - 7  Japan – Yen - 88  England – English Pound -.6  France – Euro -.7  Iraq – Iragi Dinar - 1153  Ireland – Euro -.7

50.  Types of Currency  Canada – Canadian Dollar - 1  Mexico – Mexican Peso - 13  Germany – Euro -.7  Spain – Euro -.7

51.  Exchange Rate Handout

52.  Russian Ruble  Pictured below is Nikolay Nikolayevich Muravyov- Amursky, who is a former Russian statesman

53.  Euro  The 500 Euro bill depicts modern architecture

54.  Canadian Dollar  Pictured below is Sir John Alexander Macdonald, who was the first Prime Minister of Canada

55.  Mexican Peso  Pictured below is Benito Juarez, who was 5 term Mexican President

56.  Iraqi Dinar  Pictured below is Saddam Hussein

57.  Chinese Yuan  Pictured below is Mao Zedong, who is a former Communist leader in China

58.  Japanese Yen  Pictured below is Natsume Soseki, who is a famous Japanese novelist

59.  English Pound  Pictured below is Queen Elizabeth II

60.  Impact Of A Strong U.S. Dollar  Pros  1.) It is cheaper for U.S. businesses to import from foreign countries because the dollar is strong so foreign goods and services will cost less. The consumer will benefit from this since import prices on goods would go down.  2.) It would be cheaper for U.S. citizens to travel abroad since the consumer would be getting more for their U.S. dollars. This usually makes things like food, hotels, and souvenirs cost less.

61.  Impact Of A Strong U.S. Dollar  Cons  1.) Foreign businesses are less likely to import from the United States because they can trade more goods for their money with a different country that has a currency weaker than the dollar.  2.) The U.S. is less likely to export goods when the dollar is strong; thus, foreign demand for goods will decrease. When this happens, it tends to hurt American companies by reducing their international sales.

62.  Impact Of A Weak U.S. Dollar  Pros  1.) When other currencies are strong, relative to the U.S. dollar, international firms will be able to purchase more products from the U.S. resulting in an increase in exports.  2.) When we export more goods abroad, we need more people to produce these products, so our employment rate goes up.

63.  Impact Of A Weak U.S. Dollar  Cons  1.) When our dollar is weak it costs a lot for U.S. businesses to import goods. These costs are passed on to the consumer. When this happens, prices on goods tend to rise.  2.) When we get less of a nation's currency for our dollar, it costs American tourists, business people, and students more money to travel abroad.

64.  Credit  An agreement by one party (creditor or lender) to loan money to another party (debtor or borrower) for a period of time  Common forms of credit include credit cards, student loans, car loans, personal loans, and mortgages

65.  Credit History  A record of an individuals past borrowing and repaying history  This information is used by lenders to determine an individual's likelihood of repaying the debt  Consumers with a poor repayment history will either not be offered credit or will be offered credit at a higher interest rate  Your credit history is used to provide creditors with your credit score

66.  Credit Score  A credit score is based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person  The scale ranges from 300-800 700-800 Excellent Credit 600-700 Average Credit 500-600 Below Average Credit 300-500 Serious Credit Trouble

67.  Credit Handouts  Importance of Credit  Credit Cards: A Risky Business

68.  Functions of Banks  1.) Place to safely store your money  FDIC (Federal Deposit Insurance Corporation)  Deposit insurance that guarantees the safety of deposits of member banks up to $250,000 per depositor  It was originally created in 1934 during the Great Depression as a way to create consumer confidence in the banking system  The flow of money from depositor to borrower is critical for our economy to function efficiently  Prior to 1933 bank depositors could lose all of their deposited money if their bank were to go out of business

69.  Functions of Banks  2.) Place to save your money Banks offer savings accounts, checking accounts and certificates of deposits (CD’s) Most savings accounts and all CD’s offer customers interest rates on their deposits Generally the more money you deposit and the longer you are willing to keep that money deposited, the higher the interest rate you will receive Interest Rate The fee paid from the borrower to the lender Bank depositors are considered lenders, while someone who gets a loan from a bank is considered a borrower, while the bank role in that case is the lender

70.  Functions of Banks  3.) Place to get loans Banks use what is known as Fractional Reserve Banking Fractional Reserve Banking is a system where a bank only keeps a fraction of funds on hand, and loans the rest out to borrowers

71.  How do banks make money?  By charging higher interest rates to those who borrow money from them, then they offer to those who save money with them