1. Do Now: Brainstorm the functions or uses of money.

2. Medium of exchange Standard of value (unit of account) Store of Value

3.  Durability  Portability  Divisibility  Uniformity  Limited Supply  Acceptability

4.  Commodity Money  Representative Money  Fiat Money (legal tender)

5.  Storing Money  Saving Money  Savings accounts  Checking accounts  Money Market accounts  Certificates of deposit (CDs)

6.  Loans (story of Goldsmiths)  Mortgages  Credit Cards  Simple and Compound Interest  Banks and Profit

7.  Commercial Banks  Savings and Loan Associations  Savings Banks  Credit Unions  Finance Companies

8.  Automated Teller Machines  Debit Cards  Home Banking  Automatic Clearing Houses  Stored Value Cards

9. Yes or No

10.  Creation of the Federal Reserve (1913)  Response to Panic of 1907  Central Banking System  Federal Reserve Board (Board of Governors)  12 Regional Banks  Central Bank  Establish Monetary Policy  To maintain the stability of the financial system and contain systemic risk in financial markets

11.  Securities and Exchange Commission (SEC)  1913  Response to stock market crash of October 1929  Great Depression  Regulates stock market

12.  Banking Act of 1933  Glass-Steagall  Limited commercial bank involvement in stock market investments  Too risky in light of stock market crash  Also created FDIC (Federal Deposit Insurance Corportation)

13.  Trend towards deregulation pushed for by banking industry  Intensive lobbying  Revolving Door  Savings and Loans crisis (1980s)  Bailout  Repeal of Glass-Steagall in 1999

14.  Increase in percentage of subprime mortgages  Banks assuming greater risk  Adjustable rate mortgages  Decline in home prices  Borrowers have difficulty refinancing mortgages  Rates go up and people walk away from homes  Default and foreclosure  Precipitates Great Recession