Download presentation
Presentation is loading. Please wait.
1
Splash Screen
2
Chapter Intro 2 Section 1: What Is Money? The basis of the market economy is voluntary exchange. In the American economy, the exchange usually involves money in return for a good or service. People are willing to accept money in exchange for goods, and financial institutions give people both a safe place to deposit their money or take out loans.
3
Chapter Intro 2 Section 2: The Federal Reserve System Political and economic institutions evolve to help individuals and groups accomplish their goals. The central bank of the United States is the Federal Reserve System. It controls the money supply, serves as the government’s bank, and watches over the banking industry.
4
Chapter Intro 2 Section 3: How Banks Operate Political and economic institutions evolve to help individuals and groups accomplish their goals. Banks offer important financial services to millions of people.
5
Chapter Preview-End
6
Section 1-Main Idea Guide to Reading Big Idea The basis of the market economy is voluntary exchange. In the American economy, the exchange usually involves money in return for a good or service.
7
Section 1 Money People are willing to accept money in exchange for goods.
8
Section 1 Money (cont.) Money serves different functions and comes in different forms. Functions: –Medium of exchange –Store of value –Measure of value
9
Section 1 Types: –Historically—salt, hides, gems, tobacco –CoinsCoins –CurrencyCurrency Money (cont.) Confidence in money gives value Features of U.S. Currency
10
Section 1 The Financial System Financial institutions give people a safe place to deposit their money or take out loans.
11
Section 1 The Financial System (cont.) Types of financial institutions: –Commercial banksCommercial banks –Savings and loan associations (S & L)Savings and loan associations (S & L) –Credit unionsCredit unions –All perform similar functions
12
Section 1 Regulation and insurance make the U.S. financial system one of the safest. The Financial System (cont.)
13
Section 1 Federal Deposit Insurance Corporation (FDIC) –Formed because of Great Depression –Protects individual accounts up to $100,000 The Financial System (cont.) Consumer confidence in banks fuels economic growth
14
Section 1-End
15
Section 2-Main Idea Guide to Reading Big Idea Political and economic institutions evolve to help individuals and groups accomplish their goals.
16
Section 2 Structure and Organization The central bank of the United States is the Federal Reserve System.
17
Section 2 Structure and Organization (cont.) The Federal Reserve System, or Fed, is the central bank of the U.S.central bank –Established in 1913 –Divided into 12 Federal Reserve Districts The Federal Reserve System
18
Section 2 Thousands of member banks in the Fed –Member banks are owners –Buy stock and earn dividends in the Fed Structure and Organization (cont.) The Federal Reserve System
19
Section 2 Economic decisions made by Board of Governors –President appoints, Senate ratifies seven members –One member chairs for four years –Free of political pressure Structure and Organization (cont.) The Federal Reserve System
20
Section 2 Different advisory councils report on: –Condition of economy by district –Financial institutions –Consumer loans Structure and Organization (cont.) The Federal Reserve System
21
Section 2 Federal Open Market Committee (FOMC) manipulates money supplyFederal Open Market Committee (FOMC) Structure and Organization (cont.) The Federal Reserve System
22
Section 2 Functions of the Fed The Fed controls the money supply, serves as the government’s bank, and watches over the banking industry.
23
Section 2 Functions of the Fed (cont.) The Fed: –Regulates banks –Controls the money supply –Holds the government’s money
24
Section 2 Two main regulatory functions: –Banking regulation –Consumer credit Functions of the Fed (cont.)
25
Section 2 Government’s bank –Holds government’s money –Sells bonds and Treasury bills –Issues currency Functions of the Fed (cont.)
26
Section 2 Sets monetary policy by controlling money supply and interestmonetary policy –Raises interest rate by contracting money supply –Lowers interest rate by expanding money supply Functions of the Fed (cont.) Monetary Policy and Interest Rates
27
Section 2 Fed tools: –Discount rate—lower rate stimulates economyDiscount rate –Raise and lower reserve requirements for member banksreserve –Open market operations—buying bonds stimulates economyOpen market operations Functions of the Fed (cont.) Monetary Policy and Interest Rates
28
Section 2 The Fed is effective because it can move quickly and fine-tune as needed. –Buying and selling bonds –Changes in interest rates Functions of the Fed (cont.) Monetary Policy and Interest Rates
29
Section 2-End
30
Section 3-Main Idea Guide to Reading Big Idea Political and economic institutions evolve to help individuals and groups accomplish their goals.
31
Section 3 Banking Services Banks offer important financial services for millions of people.
32
Section 3 Banking Services (cont.) Investors start banks –Need depositors for banks to grow –Interest from loans generates profits
33
Section 3 Deposits –Checking accounts—no interest or low interestChecking accounts –Savings accounts—higher interest for higher depositsSavings accounts –Certificates of deposit—set time period, higher interestCertificates of deposit –Banks make loans using deposits Banking Services (cont.)
34
Section 3 Changes in Banking Throughout American history, banking has become safer and more efficient.
35
Section 3 Changes in Banking (cont.) U.S. banking has become safer and more efficient with time. The National Bank chartered in 1791 –Supplied federal government –Many opposed it –Went out of business when charter lapsed
36
Section 3 Privately owned state banks issued currency until 1863. –National Banking Act –National currency –Federally chartered private banks Changes in Banking (cont.)
37
Section 3 Panic of 1907 –Federal Reserve Act of 1913 passed Changes in Banking (cont.)
38
Section 3 Great Depression –1930s –F. D. Roosevelt closed all banks –Only financially sound could reopen –Federal Deposit Insurance Corporation (FDIC) established Changes in Banking (cont.)
39
Section 3 The Savings and Loan Crisis –Late 1980s and early 1990s –High-risk loans –Hundreds of S&Ls failed –FDIC took over regulations of S&Ls Changes in Banking (cont.)
40
Section 3 The Gramm-Leach-Bliley Act –Passed in 1999 –Banking institutions can offer more services Changes in Banking (cont.)
41
A.A B.B Section 3 Do you agree that there could be a financial disaster like the Panic of 1907 today? A.Agree B.Disagree
42
Section 3-End
43
VS 1
44
VS 2
45
VS 3
46
VS-End
47
Figure 1
48
Figure 2A
49
Figure 2B
50
Figure 3
51
TIME Trans
52
DFS Trans 1
53
DFS Trans 2
54
DFS Trans 3
55
Vocab1 coin metallic form of money such as pennies, nickels, and dimes
56
Vocab2 currency both coins and paper money
57
Vocab3 commercial bank a financial institution that offers full banking services to individuals and businesses
58
Vocab4 savings and loan association (S&L) financial institutions that traditionally loaned money to people buying homes
59
Vocab5 credit union nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services
60
Vocab6 obvious easily found, seen, or understood
61
Vocab7 medium a means of doing
62
Vocab8 central bank an institution that lends money to other banks; also, the place where the government does its banking business
63
Vocab9 Federal Open Market Committee (FOMC) the most powerful committee of the Fed, because it makes the decisions that affect the economy as a whole by manipulating the money supply
64
Vocab10 monetary policy policy that involves changing the rate of growth of the money supply in circulation in order to affect the cost and availability of credit
65
Vocab11 discount rate interest rate the Fed charges on its loans
66
Vocab12 reserve a certain percentage of deposits that banks have to set aside as cash in their own vaults or as deposits in their Federal Reserve district bank
67
Vocab13 open market operations purchase or sale of U.S. government bonds and Treasury bills
68
Vocab14 manipulate to handle with skill
69
Vocab15 contract to become smaller
70
Vocab16 checking account an account in which deposited money can be withdrawn at any time by writing a check
71
Vocab17 savings account an account in which customers receive interest based on how much money they have deposited
72
Vocab18 certificate of deposit (CD) timed deposit that states the amount of the deposit, maturity, and rate of interest being paid
73
Vocab19 initial the very first
74
Vocab20 principal the most important
75
Vocab21 behalf in the interest of
76
Help Click the Forward button to go to the next slide. Click the Previous button to return to the previous slide. Click the Home button to return to the Chapter Menu. Click the Transparency button from the Chapter Menu or Chapter Introduction slides to access the TIME Transparency that is relevant to this chapter. From within a section, click on this button to access the relevant Daily Focus Skills Transparency. Click the Return button in a feature to return to the main presentation. Click the Economics Online button to access online textbook features. Click the Reference Atlas button to access the Interactive Reference Atlas. Click the Exit button or press the Escape key [Esc] to end the chapter slide show. Click the Help button to access this screen. Links to Presentation Plus! features such as Graphs in Motion, Charts in Motion, and figures from your textbook are located at the bottom of relevant screens. To use this Presentation Plus! product:
77
End of Custom Shows This slide is intentionally blank.
Similar presentations
© 2024 SlidePlayer.com Inc.
All rights reserved.