Money and Banking
Study Guide for the Big Test
You have a Big Test on Wednesday, November 17th. Here is a summary of the information we have learned. You will also see what documents you have that will help you study.
Case study of Sarah Peters and her debt problems.
do you remember the questions from our online review quiz?
-Why can credit card debt be bad?
Chapter 8 in the Economics Workbook – MONEY
-there will be questions from this reading and the homework assignment
Foreign Exchange Rates
- how well do you understand how foreign exchange rates are determined? Can you explain? See notes you wrote about this…
Inflation
-Review the handouts – What is inflation? Why does it happen?
-How well do you understand how inflation works?
Financial Institutions
-The BANKS notes from class will help
-The The World of Banking homework will help you here
- Be A Better Banker will help you too
The Federal Reserve Banking System (The FED
-Use your Fed Video Notes to help you study
-Use the Fed WEB Questions handout to help you study
-There will be many questions concerning the FED on this Big TEST!!
Recession
-Review handout – what is recession? Why does it happen?
-How well do you understand how recession works?
Here are some things to review and know for the Big Test. Be sure you UNDERSTAND them – don’t just memorize.
1. Sarah’s problems and solutions in the Case Study.
2. What is money? Why do we use money? (the reasons given in class)
3. What makes up the money supply?
4. The Characteristics of Money – this is what you hope your money is like – 4 characteristics—this will actually be a good essay question.
5. What are the three types of money? What are the types of money in use today? Explain and give examples
6. Identify various forms of money in the past and give reasons why they would not be good forms of money today.
7. Are Credit Cards part of the money supply? Explain why or why not….
8. What is the FED?
9. Who is the head of the FED?
10. What is the FED’s essential mission?
11. What are the 3 main responsibilities the FED has to help it carry out its essential mission?
12. In your own words, what is monetary policy?
13. What are 3 goals of the FED’s monetary policy?
14. Who does inflation hurt and how can it hurt us? (You had 4 examples)
15. Be prepared for questions that test your thinking ability. Some examples will be: if the FED/Government wants to encourage people to spend more or try to avoid a recession what could it do? If the FED wants to avoid inflation or it wants to try to slow down spending in the economy, what could it do?
16. What is the FED’s role as a Bank Supervisor?
17. KNOW some of the history of money and banking in our country (Review the FED Today video notes and the FED WEB Questions handout)
18. Give some examples of the financial services the FED offers our nation’s financial institutions (banks).
19. What are the three types of Financial Institutions found in this country? (notes from Banks power point)
20. Why don’t we just print up more money to pay off our national debts or to just give more money to everybody? EXPLAIN WHY!!!! YOU WILL HAVE TO ON YOUR BIG TEST!
21. Our paper currency is called a ______________ _______________ __________.
22. You will have some questions in which you will need a calculator. Be prepared to figure out an exchange rate question. There will also be a question that deals with interests rates at banks.
23. EXPLAIN how do banks make their money or “profit”?
24. What is purchasing or buying power?
25. Why do Money Markets and Certificates of Deposit, or CD’s, pay more interest than traditional savings accounts?
26. Why are checking accounts in banks so important?
27. There will be a number of true and false that deal with all these subjects.
28. What is inflation? (from discussions in class) MUY IMPORTANTE!
29. What is a recession? (from discussions in class) MUY IMPORTANTE!
30. How are foreign exchange rates determined? (3 things we learned from the class activity)
31. Where are foreign exchange rates decided?
32. WHY ARE LOANS SO IMPORTANT? What do we do with loans? What about access to loans/credit? Think about everything we talked about with Kiva
33. What is credit?
34. What is a credit score?
35. What is credit history?
36. What are the 8 things you should know about credit cards?
