1. The Federal Reserve EQ: What is the Federal Reserve and how does it affect the U.S. Economy? Write the new EQ

2. The Federal Reserve Central Bank of the United States Central Bank of the United States Regulates the money supply in the US economy Regulates the money supply in the US economy Raises and lowers the discount interest rate Raises and lowers the discount interest rate Puts money into circulation Puts money into circulation Removes money from circulation Removes money from circulation EQ: What is the Federal Reserve and how does it affect the U.S. Economy?

3. Impact of the Federal Reserve If the Federal Reserve raises the discount rate If the Federal Reserve raises the discount rate Consumer credit becomes more expensive Consumer credit becomes more expensive Consumers buy fewer large goods— refrigerators, boats, etc. Consumers buy fewer large goods— refrigerators, boats, etc. If the Federal reserve lowers the discount rate If the Federal reserve lowers the discount rate Consumer credit becomes less expensive Consumer credit becomes less expensive Consumers buy more expensive goods—cars, washing machines, etc. Consumers buy more expensive goods—cars, washing machines, etc. EQ: What is the Federal Reserve and how does it affect the U.S. Economy?

4. The Federal Reserve System Get the FACTS! BME Webpage

5. What are stocks? NEW EQ: What is the Stock Market and how does it affect the U.S. economy? Blue Federal Reserve Packet Answer Ticket in the Door

6. What are stocks? Stocks are shares of ownership in corporations Stocks are shares of ownership in corporations Shareholders have partial ownership in the corporation Shareholders have partial ownership in the corporation Corporations are permitted to sell stock to raise capital for the corporation Corporations are permitted to sell stock to raise capital for the corporation Shareholders may receive dividend payments from the corporation Shareholders may receive dividend payments from the corporation NEW EQ: What is the Stock Market and how does it affect the U.S. economy?

7. Stock Certificate Sample EQ: What is the Stock Market and how does it affect the U.S. economy?

8. What other investments are traded? Bonds—loans made by the investor to the issuer; the investor is repaid with interest Bonds—loans made by the investor to the issuer; the investor is repaid with interest Corporate Bonds Corporate Bonds Municipal Bonds Municipal Bonds Treasury Bonds Treasury Bonds US Savings Bonds US Savings Bonds Futures—agreement to buy or sell a commodity (oil, gold, etc.) at some point Futures—agreement to buy or sell a commodity (oil, gold, etc.) at some point Mutual Funds—combination of individual stocks Mutual Funds—combination of individual stocks Stocks, Bonds, Futures, and Mutual Funds are called Securities. Stocks, Bonds, Futures, and Mutual Funds are called Securities. EQ: What is the Stock Market and how does it affect the U.S. economy?

9. The Stock Market’s Purpose The stock market is where shares of stocks, bonds, and futures are bought and sold (or traded). (Can be electronic.) The stock market is where shares of stocks, bonds, and futures are bought and sold (or traded). (Can be electronic.) The stock exchange is the actual physical location where stocks are listed and traded. The stock exchange is the actual physical location where stocks are listed and traded. New York Stock Exchange (NYSE) New York Stock Exchange (NYSE) American Stock Exchange American Stock Exchange NASDAQ—virtual exchange NASDAQ—virtual exchange EQ: What is the Stock Market and how does it affect the U.S. economy?

10. The Stock Market’s Functions Provides companies with a way of issuing shares of stock to people who want to invest in the company. The sale of shares of stock is a way for the corporations to raise money. Provides companies with a way of issuing shares of stock to people who want to invest in the company. The sale of shares of stock is a way for the corporations to raise money. Provides a place for the buying, selling and trading of stocks (and other securities). Provides a place for the buying, selling and trading of stocks (and other securities). EQ: What is the Stock Market and how does it affect the U.S. economy?

11. Impact of the Stock Market on the Economy Bull Market Bull Market Stock prices going up or rising Stock prices going up or rising Consumers are optimistic and buy stock hoping to earn more money Consumers are optimistic and buy stock hoping to earn more money Consumers buy goods and businesses prosper Consumers buy goods and businesses prosper Bear Market Bear Market Stock prices are going down or falling Stock prices are going down or falling Consumers are pessimistic and reluctant to buy stock Consumers are pessimistic and reluctant to buy stock Investors sell stock so they won’t lose more money Investors sell stock so they won’t lose more money Consumers buy fewer goods and businesses may lose money. Some workers may lose jobs. Consumers buy fewer goods and businesses may lose money. Some workers may lose jobs. EQ: What is the Stock Market and how does it affect the U.S. economy?

12. Impact of E-commerce on the Economy Because consumers can purchase goods on the Internet they have more choices in goods. Because consumers can purchase goods on the Internet they have more choices in goods. Global competition is increased and US businesses must compete globally. Global competition is increased and US businesses must compete globally. Fewer salespeople are needed in stores—a shift in jobs is required. More people are needed in order fulfillment and customer service. Fewer salespeople are needed in stores—a shift in jobs is required. More people are needed in order fulfillment and customer service. Goods are manufactured just-in-time—as they are needed for distribution. Goods are manufactured just-in-time—as they are needed for distribution. NEW EQ: What is e-commerce and how does it affect the U.S. economy?

13. What are stocks? Stocks are shares of ownership in corporations Stocks are shares of ownership in corporations Shareholders have partial ownership in the corporation Shareholders have partial ownership in the corporation Corporations are permitted to sell stock to raise capital for the corporation Corporations are permitted to sell stock to raise capital for the corporation Shareholders may receive dividend payments from the corporation Shareholders may receive dividend payments from the corporation EQ: What is the Federal Reserve and how does it affect the U.S. Economy?

14. What other investments are traded? Bonds—loans made by the investor to the issuer; the investor is repaid with interest Bonds—loans made by the investor to the issuer; the investor is repaid with interest Corporate Bonds Corporate Bonds Municipal Bonds Municipal Bonds Treasury Bonds Treasury Bonds US Savings Bonds US Savings Bonds Futures—agreement to buy or sell a commodity (oil, gold, etc.) at some point Futures—agreement to buy or sell a commodity (oil, gold, etc.) at some point Mutual Funds—combination of individual stocks Mutual Funds—combination of individual stocks Stocks, Bonds, Futures, and Mutual Funds are called Securities. Stocks, Bonds, Futures, and Mutual Funds are called Securities. EQ: What is the Federal Reserve and how does it affect the U.S. Economy?

15. The Stock Market’s Purpose The stock market is where shares of stocks, bonds, and futures are bought and sold (or traded). (Can be electronic.) The stock market is where shares of stocks, bonds, and futures are bought and sold (or traded). (Can be electronic.) The stock exchange is the actual physical location where stocks are listed and traded. The stock exchange is the actual physical location where stocks are listed and traded. New York Stock Exchange (NYSE) New York Stock Exchange (NYSE) American Stock Exchange American Stock Exchange NASDAQ—virtual exchange NASDAQ—virtual exchange EQ: What is the Federal Reserve and how does it affect the U.S. Economy?

16. The Stock Market’s Functions Provides companies with a way of issuing shares of stock to people who want to invest in the company. The sale of shares of stock is a way for the corporations to raise money. Provides companies with a way of issuing shares of stock to people who want to invest in the company. The sale of shares of stock is a way for the corporations to raise money. Provides a place for the buying, selling and trading of stocks (and other securities). Provides a place for the buying, selling and trading of stocks (and other securities). EQ: What is the Federal Reserve and how does it affect the U.S. Economy?

17. Impact of the Stock Market on the Economy Bull Market Bull Market Stock prices going up or rising Stock prices going up or rising Consumers are optimistic and buy stock hoping to earn more money Consumers are optimistic and buy stock hoping to earn more money Consumers buy goods and businesses prosper Consumers buy goods and businesses prosper Bear Market Bear Market Stock prices are going down or falling Stock prices are going down or falling Consumers are pessimistic and reluctant to buy stock Consumers are pessimistic and reluctant to buy stock Investors sell stock so they won’t lose more money Investors sell stock so they won’t lose more money Consumers buy fewer goods and businesses may lose money. Some workers may lose jobs. Consumers buy fewer goods and businesses may lose money. Some workers may lose jobs. EQ: What is the Federal Reserve and how does it affect the U.S. Economy?

18. Impact of E-commerce on the Economy Because consumers can purchase goods on the Internet they have more choices in goods. Because consumers can purchase goods on the Internet they have more choices in goods. Global competition is increased and US businesses must compete globally. Global competition is increased and US businesses must compete globally. Fewer salespeople are needed in stores—a shift in jobs is required. More people are needed in order fulfillment and customer service. Fewer salespeople are needed in stores—a shift in jobs is required. More people are needed in order fulfillment and customer service. Goods are manufactured just-in-time—as they are needed for distribution. Goods are manufactured just-in-time—as they are needed for distribution. EQ: What is the Federal Reserve and how does it affect the U.S. Economy?