1. Problems Facing New Government I. Economic questions Continental Currency 

2. A. Adam Smith and Capitalism 1. Private ownership 2. Little gov’t control 3. Money should be invested (capital)

3. 4. The market will determine product and price iPad 2 Sold Out: Newbies Go on Buying Spree Buying Spree

4. B. Hamilton’s Plan 1. Pay all war debts a. south has paid most of their debts, does not want to pay more b. Hamilton gets help from Jefferson c. In return Capitol is placed in the south

5. 2. Tariffs

6. 3. National Bank

7. One of the more mysterious areas of the economy is the role of the Fed. Formally known as the Federal Reserve, the Fed is the gatekeeper of the U.S. economy. It is the central bank of the United States -- it is the bank of banks and the bank of the U.S. government. The Fed regulates financial institutions, manages the nation's money and influences the economy. By raising and lowering interest rates, creating money and using a few other tricks, the Fed can either stimulate or slow down the economy. This manipulation helps maintain low inflation, high employment rates, and manufacturing output. One of the more mysterious areas of the economy is the role of the Fed. Formally known as the Federal Reserve, the Fed is the gatekeeper of the U.S. economy. It is the central bank of the United States -- it is the bank of banks and the bank of the U.S. government. The Fed regulates financial institutions, manages the nation's money and influences the economy. By raising and lowering interest rates, creating money and using a few other tricks, the Fed can either stimulate or slow down the economy. This manipulation helps maintain low inflation, high employment rates, and manufacturing output.bankUnited StatesgovernmentbankUnited Statesgovernment

8. A. issue paper money B. make loans

9. C. Loose Constructionist = for the bank 1. Alexander Hamilton 2. Powers not expressly forbidden by the Constitution are granted to the government. 3. Will become the Federalist Party

10. D. Strict Constructionist = against the bank 1. Madison & Jefferson 2. Believe powers not expressly granted to the federal government by the Constitution cannot be exercised by the government. 3. Will become the Democratic- Republican Party (confusing ain’t it?) E. Bank of the United States opens in Philadelphia 1791 E. Bank of the United States opens in Philadelphia 1791

11. II. War and Rebellion A. Fallen Timbers 1. Miami Indians are encouraged by the British to attack Americans 2. They are defeated partly because the British do not give the support they promised

12. B. Whiskey Rebellion 1. Taxes on whiskey 2. Farmers from western PA. Convert crops to whiskey for easier transportation and sale. 3. Farmers use violence to prevent collection of the tax 4. President Washington (and General Hamilton) lead a militia of 13,000 to end the rebellion