Week of March 21st AGENDA GPS: SSEMI1b & SSEMA2a Raider Prep Today’s Do Now Then: Be prepared for Notes & CW READ Functions of Money (p 286) READ Characteristics of Money (p. 289-290) Raiders Learn (Lesson): Notes: Federal Reserve System Raiders in Action (Learning Assessment): CW: Money (Ch 11 p. 285-290) $1 Bill Activity – Where did the money come from? Raiders Take Out (Homework): TA5 Quiz Monday, March 28 QUIZ on Fri (NO NOTEBOOK!!!)
Georgia Performance Standards: SSEMI1 (Social Studies Economics Micro #1) The student will describe how households, businesses, & governments are interdependent & interact through the flows of goods, services, & money. Explain the role of money & how it facilitates exchange. SSEMA2 (Social Studies Economics Macro #2) The student will explain the role & functions of the Federal Reserve System. Describe the organization of the Federal Reserve System.
FUNCTIONS of Money Medium of Exchange- something accepted by all parties as payment for G/S Measure of Value (unit of accounting): common denominator that can be used to express worth in terms that most people can understand Ex: dollar, pound, yen, ruble, peso, Euro- useful in comparing values of different items 3. Store of Value- for use later in the economy; saved until needed
CHARACTERISTICS OF MONEY: PORTABLE- CARRIED EASILY DURABLE- PAPER MONEY LASTS ABOUT 1 YEAR DIVISIBLE- MAKE PURCHASES INTO ANY AMOUNT LIMITED AVAILABILITY (limited in supply)- LOSES VALUE WHENEVER TOO MUCH IS PRODUCED
CW 3/21/11: MONEY Each group has been assigned a product Use pages 285-290 of your book to explain the following for your product: a) What functions of money could it fulfill, if any? b) How so or not so? 2.a)What characteristics of money does it fulfill, if any? b) How so or not so? Read Cybernomicswhole group pg. 286 3. a) Does cybercurrency fulfill the functions & characteristics of money? b) Why or why not? c) Do you think that paper & coin money will eventually disappear? d) Why or why not?
Federal Reserve System (FED) Created in 1913 under President Wilson
FED Duties Conducts nation’s monetary policy (control money supply) Regulates banks Maintains stability of financial system Provides Services to….. A. U.S. Gov’t Banks B. Banks- clears checks and makes loans C. Foreign Financial Institutions D. Distributes Currency
“FAMILY TREE” of the Federal Reserve System FED (Great-Grandparents) FOMC Board of Governors Advisory Councils (Great Aunts/Uncles) DISTRICT BANKS (Grand-Parents) BRANCH BANKS (Parents) MEMBER BANKS (Grandchildren)
ORGANIZATION OF FED Board of Governors (7 members total) Members 6 Serve 14 year terms Chair 1 Serves 4 year term Currently: Ben Bernanke All Appointed by the President Approved by the Senate
ORGANIZATION OF FED Advisory Councils (advise Board of Governors) Federal Advisory Council Rep from each District Bank Advise on overall health of economy Consumer Advisory Council Reps from education & consumer industries Advise 3 times/yr on consumer credit laws Thrift Institution Advisory Council Reps from financial institutions Advise 3 times/yr on savings matters
ORGANIZATION OF FED Federal Open Market Committee (FOMC) VotingMembers (12 total) Board of Governors President of NY District FED 4 Presidents from other District Banks (serve 1 yr on FOMC on rotating basis) Function Meet 8 times per year in Washington D.C. Review status of economy Set FED Monetary Policy
ORGANIZATION OF FED 12 FED District Banks Independent of other district banks Each has own President & Board Supervised by the FED Function: Act as a bank for member banks 25 FED Branch Banks Thousands of Member Banks
12 FED – District Banks and 25 FED Branch Banks
$1 Bill – Where did it come from?1. Name of City in Seal2. # of District Bank3. Letter of District Bank