Chapter 15

Chapter 15 - Chapter 15 Money and the Financial System...

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Chapter 15 Money and the Financial System Objectives a. Define money, its functions, and its characteristics. b. Describe various types of money. c. Specify how the Federal Reserve Board manages the money supply and regulates the American banking system. d. Compare and contrast commercial banks, savings and loan associations, credit unions, and mutual savings banks. e. Distinguish among nonbanking institutions such as insurance companies, pension funds, mutual funds, and finance companies. f. Investigate the challenges ahead for the banking industry. g. Recommend the most appropriate financial institution for a hypothetical small business. Money in the Financial System 0. Finance 0. 0. The study of money-- how it’s made, how it’s lost, and why 1. Money 1. Anything generally accepted in exchange for goods and services The Functions of Money 0. Medium of exchange 0. Accepted as payment for products and resources 1. Measure of value 1. Single standard for assigning and comparing values of products and resources 2. Store of value 2. Means of retaining and accumulating wealth The Characteristics of Money 2. Acceptability 3. Divisibility 4. Portability 5. Stability 6. Durability 7. Difficulty to counterfeit The Life Expectancy of Paper Currency Types of Money 0. Checking account 1. Savings account 2. Money market account 3. Certificate of deposit 1
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This note was uploaded on 04/21/2008 for the course BUSA 106 taught by Professor Staff during the Spring '08 term at Winona.

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Chapter 15 - Chapter 15 Money and the Financial System...

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