 Bell Ringer:  We’re going to begin talking money. Do you know which presidents (or other people) are listed on the following currency/coin? Write what you know and we’ll review the correct answers. which presidents  $1--?$100?  $2--?1¢?  $5--?5¢?  $10?10¢?  $20?25¢?  $50? Today: --Chapters 12&13 TEST—How did you do? What’s your current Bus. Econ grade? What can you still turn in?? --LNE Winners of SMG??!!?? --Functions & Characteristics of Money

Class Name # of Teams Requested Team IDsRankingsTotal EquityPassword Advisor~NE_40_T292215xxxxxxxxx Bus Econ Pd 25 NE_40_ZZ230 NE_40_ZZ231 NE_40_ZZ232 NE_40_ZZ234 NE_40_ZZ $100, $99, $100, $100, $98, xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx Bus Econ Pd 46 NE_40_ZZ236 NE_40_ZZ237 NE_40_ZZ238 NE_40_ZZ239 NE_40_ZZ240 NE_40_ZZ $100, $96, $102, $100, $100, $98, xxxxxxxxx xxxxxxxxx xxxxxxxxx Click a Team ID to access that team's portfolio.

 Bryant  Anthony  Nate  SMG Grades—on Grade Report  Would you like additional points? See my web site...

 Amanda  Elise  Talon  SMG Grades—on Grade Report  Would you like additional points? See my web site...

Chapter 14

 The basis is voluntary exchange  Bills, coins, checks  Historically – shells, gold, or sheep  Native Americans used wampum – beads wampum made from shells  People in the Fiji Islands used whales’ teeth

 Money: anything customarily used as a medium of exchange, a unit of accounting, and a store of value  Medium of exchange: use of money for exchange for goods or services

 Barter: exchange of goods and services for other goods and services  This tactic would be used if money didn’t exist  Requires a double coincidence of wants ▪ Each party must want exactly what the other has

 Unit of accounting: use of money as a yardstick for comparing the values of goods and services in relation to one another  Each nation uses a basic unit to measure the value of goods, just as it uses a foot or meter to measure distance

Units by nation  United States: Dollar  Japan: Yen – 0.01 US Dollar  Europe: Euro – 1.36 US Dollar  Brazil: Real – 0.45 US Dollar  India: Rupee – US Dollar  Russia: Ruble – US Dollar  Australia: Dollar – 0.94 US Dollar

 A single unit of accounting also allows people to keep accurate financial records  Debts owed  Income saved  Salaries  Many more

 Store of value: use of money to store purchasing power for later use  People usually receive their money income once, twice, or four times a month, but spend it at all points during a pay period  Storing your income in the form of cash or in a checking account keeps the value for when you want to use it at a later time

 Anything that people are willing to accept in exchange for goods can serve as money  Historic examples include the following:  Cattle  Salt  Animal hides  Gems  Tobacco (first page of notes should be completed)

 Chapter 14 Vocab  After completing the notes, you should be able to complete at least four or five of these ▪ DO NOT TURN IN—KEEP IN YOUR FOLDER UNTIIL WE FINISH IT  Guided Reading 14-1  Feel free to use your textbook  If you finish it, turn it in. It is NOT due, tho. ▪ It’s due on TEST DAY

 Bell Ringer:  More trivia about money and how long it lasts:money and how long it lasts  “Guess” the number of years the following notes remain in circulation before they are no longer able to use. ▪ For Example: the $1 bill lasts 5.8 years ▪ What about?? ▪ The $5? The $10? The $20? The $50? The $100? (turn in bell ringer form) ▪ TRADE WITH CUBA NEWSPAPER ARTICLE ▪ Nebraska Unemployment Rate...

 Commodity Money: a medium of exchange such as cattle or gems that has value as a commodity or good aside from its value as money  Representative Money: Money that is backed by an item of value, such as gold or silver

 Fiat Money: money that has value because a government fiat, or order, has established it as acceptable for payment of debts ▪ “Fiat”—latin word for “it shall be”—based on faith  Legal Tender: money that by law must be accepted for payment of public and private debts  What Gives a Dollar Bill its Value? What Gives a Dollar Bill its Value?

 What is Bitcoin?Bitcoin  Watch this 3 minute video to get an overview  How many Bitcoins can you purchase today with 1 US dollar? (Bitcoin exchange rate)Bitcoin exchange rate

Section 2

 During the early colonial period of American history, England did not permit the new colonies to print money or mint coins  Bartering became common  To help pay for the Revolutionary War, the Continental Congress issued bills of credit, called Continentals, that could be used to pay debts.  So many of these were issued that they became worthless and many places wouldn’t accept them

 The Constitution, ratified in 1788, gave Congress the power to mint coins.  In 1792, Congress passed the Coinage Act, which established the dollar as the basic unit of currency for the nation.  Our nation’s new leaders were torn between a national banking system and a state-chartered banking system.  Today we have both

 Why do we choose one bank over another? Different banks offer different services to entice customers.  Overdraft checking: checking account that allows a customer to write a check for more money than exists in his or her account

 Electronic Funds Transfer (EFT): system of transferring funds from one bank account directly to another without any paper money changing hands  Automated Teller Machines (ATM): unit that allows consumers to do their banking without the help of a teller

 With EFT, comes the chance of identity theft. Since everything is stored in a computer, if someone knew how to get around the security, your information and money could be stolen!  The Electronic Funds Transfer Act of 1978 describes the rights and responsibilities of participants in EFT systems.

 EFT customers are responsible for $50 in losses when someone steals or illegally uses their ATM cards, if they report the cards missing within 2 days.  If they wait longer, they could be held responsible for up to $500 !

Section 3

 Many people use the term “money” to refer only to “cash” but there are many different forms of money  Checking account: account in which deposited funds can be withdrawn at any time by writing a check

 Bell Ringer (new form)  Explain in 2-3 sentences what fiat money is.  Today: Chapter 14, Section 3  What are the types of money?  The difference between M1 and M2?  The difference between debit/credit cards?

 Checkable deposits: funds deposited in a bank that can be withdrawn at any time by presenting a check  Does your employer pay you using a debit card? Does your employer pay you using a debit card?

 Thrift institutions: mutual savings banks, Savings and Loans, and credit unions that offer many of the same services as commercial banks

 Credit cards are technically not “money.” They defer payments rather than complete transactions that ultimately involve the use of money.  Debit card : device used to make cashless purchases; money is electronically withdrawn from the consumer’s checkable account and transferred directly to the store’s bank account  Usually within 72 hours  Debit cards vs. Credits Cards short video (8 min) Debit cards vs. Credits Cards

 Near moneys: assets such as savings accounts that can be turned into money relatively easily and without the risk of loss of value

 M1 : narrowest definition of the money supply; consists of moneys that can be spent immediately and against which checks can be written  M2 : broader definition of the money supply; includes all of M1, plus such near moneys as savings deposits, small-denomination time deposits, money market deposit accounts, and retail money market mutual fund balances  Fed information on M1&M2 Fed information on M1&M2

 Bell Ringer: Without just rewriting the definitions, please state the difference of M1 and M2 in discussing money supply. Use at least 2 sentences.  Today:  Money supply chart  Chapter 14 Vocab/Guided Reading  Debit cards vs. Credits Cards short video (8 min) Debit cards vs. Credits Cards  Take Away Questions from video  SMG time in lab????