Intro to the FED
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Intro to the FED

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3/21/11

3/21/11

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    Intro to the FED Intro to the FED Presentation Transcript

    • 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.
    • 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
    • PRODUCTS for Classwork:
      1Pink,4 Orange - Water
      2 Pink, 5 Orange - Oranges
      3 Pink,6 Orange - Gold
      4 Pink,7 Orange - Beads
      5 Pink - Corn
      6 Pink - Books
      7 Pink - Dried beans
      1 Orange - Blank Compact Discs
      2 Orange - Furs
      3 Orange - Pencils
    • 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