Intro to the FED

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3/21/11

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Intro to the FED

  1. 1. Week of March 21st AGENDA<br />GPS: SSEMI1b & SSEMA2a<br />Raider Prep Today’s Do Now<br />Then: Be prepared for Notes & CW<br /> READ Functions of Money (p 286)<br /> READ Characteristics of Money (p. 289-290)<br />Raiders Learn (Lesson):<br /> Notes: Federal Reserve System<br />Raiders in Action (Learning Assessment):<br /> CW: Money (Ch 11 p. 285-290)<br />$1 Bill Activity – Where did the money come from?<br />Raiders Take Out (Homework):<br />TA5 Quiz Monday, March 28<br /> QUIZ on Fri (NO NOTEBOOK!!!)<br />
  2. 2. Georgia Performance Standards:<br />SSEMI1 (Social Studies Economics Micro #1)<br />The student will describe how households,<br />businesses, & governments are interdependent & <br />interact through the flows of goods, services, & money.<br />Explain the role of money & how it facilitates <br /> exchange.<br />SSEMA2 (Social Studies Economics Macro #2)<br />The student will explain the role & functions of the<br />Federal Reserve System.<br />Describe the organization of the Federal Reserve<br /> System.<br />
  3. 3. The Federal Reserve System<br />
  4. 4. FUNCTIONS of Money<br />Medium of Exchange- <br />something accepted by all parties as payment for G/S<br />Measure of Value (unit of accounting):<br />common denominator that can be used to express worth in terms that most people can understand<br />Ex: dollar, pound, yen, ruble, peso, Euro- <br /> useful in comparing values of different items<br />3. Store of Value-<br />for use later in the economy; saved until needed<br />
  5. 5. CHARACTERISTICS OF MONEY:<br />PORTABLE- CARRIED EASILY<br />DURABLE- PAPER MONEY LASTS ABOUT 1 YEAR<br />DIVISIBLE- MAKE PURCHASES INTO ANY AMOUNT<br />LIMITED AVAILABILITY (limited in supply)- LOSES VALUE WHENEVER TOO MUCH IS PRODUCED<br />
  6. 6. PRODUCTS for Classwork:<br />1Pink,4 Orange - Water<br />2 Pink, 5 Orange - Oranges<br />3 Pink,6 Orange - Gold<br />4 Pink,7 Orange - Beads<br />5 Pink - Corn<br />6 Pink - Books<br />7 Pink - Dried beans<br />1 Orange - Blank Compact Discs<br />2 Orange - Furs<br />3 Orange - Pencils<br />
  7. 7. CW 3/21/11: MONEY<br />Each group has been assigned a product<br />Use pages 285-290 of your book to explain the<br />following for your product:<br />a) What functions of money could it fulfill, if any?<br /> b) How so or not so?<br />2.a)What characteristics of money does it fulfill, if any?<br /> b) How so or not so?<br />Read Cybernomicswhole group pg. 286<br />3. a) Does cybercurrency fulfill the functions & <br />characteristics of money? b) Why or why not? <br />c) Do you think that paper & coin money will<br /> eventually disappear? d) Why or why not?<br />
  8. 8. Federal Reserve System (FED)<br />Created in 1913 under President Wilson <br />
  9. 9. FED Duties<br /> Conducts nation’s monetary policy (control money supply)<br />Regulates banks<br />Maintains stability of financial system<br />Provides Services to…..<br />A. U.S. Gov’t Banks <br />B. Banks- clears checks and makes loans<br />C. Foreign Financial Institutions<br />D. Distributes Currency<br />
  10. 10. “FAMILY TREE” of the Federal Reserve System<br />FED <br />(Great-Grandparents) <br />FOMC<br />Board of Governors<br />Advisory Councils<br />(Great Aunts/Uncles)<br />DISTRICT BANKS <br />(Grand-Parents)<br />BRANCH BANKS <br />(Parents)<br />MEMBER BANKS<br /> (Grandchildren)<br />
  11. 11. ORGANIZATION OF FED<br />Board of Governors (7 members total)<br />Members<br /> 6<br /> Serve 14 year terms<br />Chair<br /> 1<br /> Serves 4 year term<br /> Currently: Ben Bernanke<br />All<br /> Appointed by the President<br /> Approved by the Senate<br />
  12. 12. ORGANIZATION OF FED<br />Advisory Councils (advise Board of Governors)<br />Federal Advisory Council<br />Rep from each District Bank<br /> Advise on overall health of economy<br />Consumer Advisory Council<br />Reps from education & consumer <br /> industries<br />Advise 3 times/yr on consumer<br /> credit laws<br />Thrift Institution Advisory Council<br />Reps from financial institutions<br /> Advise 3 times/yr on savings matters<br />
  13. 13. ORGANIZATION OF FED<br />Federal Open Market Committee (FOMC)<br />VotingMembers (12 total)<br /> Board of Governors<br /> President of NY District FED<br /> 4 Presidents from other District Banks<br /> (serve 1 yr on FOMC on rotating basis)<br />Function<br />Meet 8 times per year in Washington D.C. <br /> Review status of economy<br /> Set FED Monetary Policy<br />
  14. 14. ORGANIZATION OF FED<br />12 FED District Banks<br /> Independent of other district banks<br />Each has own President & Board<br />Supervised by the FED<br />Function:<br /> Act as a bank for member banks<br />25 FED Branch Banks <br />Thousands of Member Banks<br />
  15. 15. 12 FED – District Banks and 25 FED Branch Banks<br />
  16. 16. $1 Bill – Where did it come from?1. Name of City in Seal2. # of District Bank3. Letter of District Bank<br />

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