Unit 4: Banking Section 2: What affects your $$$

I CAN: Explain how each affects your $$ ◦ Fiscal Policy, Monetary Policy, Interest Rates

Monetary Policy Policies of the Federal Reserve Banks create this type of policy ◦ These policies are used to help ensure price and economy stability in the US ◦ The FED makes money (this is our money supply).  If they make a lot of money, interest rates go LOWER  If they stop making as much money, interest rates go HIGHER  How does this affect YOUR MONEY?

Interest Rates Interest rates are the COST of MONEY ◦ If you want a $200,000 home and you only have $10,000, you are willing to pay more than $200,000 so you can have your home NOW

Fiscal Policy Tax and spending policies of the Federal Government ◦ How does this affect YOUR MONEY?

CAN I? Explain how each affects your $$ ◦ Fiscal Policy, Monetary Policy, Interest Rates I can prove this by completing: 4.2 Which type of policy