Section Outline 1 of 7 Money and Banking Section 2: Our Banking System I.The Beginnings of Banking II.The Kinds of Money III.Bank Services IV.The Business.

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Presentation transcript:

Section Outline 1 of 7 Money and Banking Section 2: Our Banking System I.The Beginnings of Banking II.The Kinds of Money III.Bank Services IV.The Business of Banking Section Reading Support Transparency

2 of 7 Money and Banking Section 2: Our Banking System Main Idea Banks hold citizens’ funds for safekeeping, enable them to pay for items, using alternatives to currency, and give them short- and long-term loans. Banks enable citizens to participate more fully in their economy. Key Terms Demand deposit Loan Money supply Fractional reserve banking

The Beginnings of Banking Banks have been used since the Middle Ages in Europe. 3 of 7 Money and Banking Section 2: Our Banking System Banks perform a variety of functions for their clients. Banks have played a crucial role in shaping the United States of America.

4 of 7 Money and Banking Section 2: Our Banking System The Kinds of Money Checks —Checks are accepted as a means of exchange. —Traveler’s checks —Demand deposit: the money in a checking account Banks and Money Supply —Money supply: the total amount of money that is available for use as a medium of exchange Go Online: The Story of a Check

5 of 7 Money and Banking Section 2: Our Banking System Bank Services Checking Accounts Savings Accounts —Savings collect “interest” from the bank. Loans —A loan is an amount of money borrowed for a certain time period. —Interest: A percentage borrowers pay on a loan, as a fee for receiving the loan.

6 of 7 Money and Banking Section 2: Our Banking System The Business of Banking Fractional Reserve Banking —Banks that keep a percentage of checking and savings deposits in reserve Other Financial Institutions —Savings and loan associations —Mutual savings banks —Credit unions

Money and Banking: Section 2 Section Reading Support Transparency 7 of 7

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