2. WELCOME MAY 17, 2016 1.Warm-up 2007 SOL Released Test Questions 21-25 2.SOL Test Monday, May 23 3.Economics Vocabulary Quiz Friday, May 19

3. WARM-UP C High Campaign Costs

4. WARM-UP G Identifying Candidates

5. WARM-UP D are often concerned with one issue

6. WARM-UP J Recognizing bias

7. WARM-UP C Nominating qualified candidates

8. SOL REVIEW

9. THE FEDERAL RESERVE SYSTEM (FED) BACKGROUND What is the “Fed”? The Federal Reserve System, also known as "The Fed," is the ____________ bank of the United States. In its role as a central bank, the Fed is a bank for other ___________ and a bank for the _____________ government. It was created to provide the nation with a safer, more flexible, and more stable ___________ and financial system. Central Banks Federal monetary

10. Over the years, its role in banking and the economy has expanded. The Federal Reserve System is a network of ________ Federal Reserve Banks and a number of branches under the general oversight of the Board of Governors. The Reserve Banks are the operating arms of the central bank. twelve THE FEDERAL RESERVE SYSTEM (FED) BACKGROUND

11. THE FEDERAL RESERVE SYSTEM (FED) RESPONSIBILITIES:  conducting the nation’s monetary policy to help maintain _______________________, keep __________ stable, and keep __________ rates relatively low  supervising and regulating ___________ institutions to make sure they are safe places for people to keep their money and to protect _______________ credit rights. employment pricesinterest banking Consumers’

12. THE FEDERAL RESERVE SYSTEM (FED) RESPONSIBILITIES: providing financial services to depository institutions, the U.S. government, and foreign central banks, including playing a major role in clearing checks, processing electronic payments, and distributing coin and paper money to the nation's banks, credit unions, savings and loan associations, and savings banks. Providing financial services to depository institutions, the U.S. ________________, and foreign central banks, including playing a major role in _____________________, processing __________________ payments, and _______________________ and ___________________ to the nation’s banks, credit unions, savings and loan associations, and savings banks. government clearing checks electronic distributing coin paper money

13. THE FEDERAL RESERVE SYSTEM (FED) RESPONSIBILITIES: providing financial services to depository institutions, the U.S. government, and foreign central banks, including playing a major role in clearing checks, processing electronic payments, and distributing coin and paper money to the nation's banks, credit unions, savings and loan associations, and savings banks. The Federal Reserve System also: Conducts ___________________ on the U.S. and regional economies Distributes ___________________ about the economy through publications, speeches, educational seminars, and web sites. research information

14. THE FEDERAL RESERVE SYSTEM (FED) FIGHTING INFLATION prices Increasing One important role of the Fed is to fight inflation. Inflation means that the general level of ______________ of goods and services is _________________. When inflation is ____________, the prices of goods and services can increase faster than consumers’ _____________, And that means the amount of goods and services are able to purchase goes ____________. rapid income down

15. THE FEDERAL RESERVE SYSTEM (FED) FIGHTING INFLATION control dollar declined slow In other words, the purchasing power of money has ____________. With inflation, a ____________ buy less and less over time. To __________ inflation the Fed can take one or more several actions to __________ the economy

16. THE FEDERAL RESERVE SYSTEM (FED) INFLUENCES THE ECONOMY – SLOW DOWN spending Increasing increases slow The Fed can _______ the economy by _____________ the money supply. To do this the Fed: _____________ taxes Increasing government ______________ Decreasing government__________________ ______________ the reserve requirement of private financial institutions reducing borrowing

17. Imagine that the U.S. economy is like a campfire.

18. If the campfire gets too big, that’s bad!

19. If the economy grows too large, we have high prices and inflation.

20. If the economy grows too rapidly, the government would decrease the amount of money in circulation to slow economic growth. If the fire became too big, you could remove some sticks and logs to make the fire slow down.

21. The government tries to slow down inflation in several ways: 1.Congress can raise taxes so that businesses and individuals have less money to spend. 2.The Treasury Department can borrow more money by selling bonds. 3.The government can decrease the amount of money it spends. But don’t forget about the role of…

22. (The Federal Reserve System) The “Fed” One of the functions of the Federal Reserve is to help maintain a stable economy. One way it does this is by raising or lowering the interest rate they charge to banks.

23. If there is inflation, the Fed can raise interest rates to make it harder for individuals and business to borrow money. This also encourages individuals to save more money in the bank, leaving less money in the economy.