1. Starter  What is the business cycle and what are the four phases of the business cycle?

2. Credit: How would you handle it? 1. Your aunt gives you $50 for your birthday. Would you? a.Put it in savings account b.Buy yourself something that you need c.Consider it extra spending money d.Treat yourself to a night out 2. If you got a new job that pays $150 a week, would you? a.Open a savings b.Wait until you first paycheck, then decide what to do c.Make a plan to payoff your bills d.Start shopping for a new IPod 3. When you someone money, do you feel a.Uncomfortable until it is paid off b.Aware of the debt but not uncomfortable about it c.Interested in paying it off as soon as it is convenient d.Willing to pay but not in a hurry

3. 4. If your best friend asked to borrow $40 from you, would you a.Lend it but only in an emergency b.Be happy to lend it c.Be willing to lend it but want to know when you would get it back d.Not willing to lend it 5. When you buy something, do you a.Have to be sure of all details before you buy b.Ask some questions but not too many c.Listen to what the salesperson tells you d.Assume everything will be OK 6. If a bill is due the first of the month, would you mail the payment a.At least 10 days in advance to be sure it gets there on time b.About 5 days before it is due c.A day or so before the due date d.When you had the money 7. How often do you buy something on impulse? a.Never b.Very rarely c.Sometime d.Almost always

5. Money And United States Federal Reserve What is Money? What is the purpose of the Federal Reserve? What does the FED do? Who is in charge of the Fed? Why are so many levels of boards in charge of the FED? What is the purpose of the monetary policy?

6. Money Functions of Money  1.medium of exchange 2. Store of value (hold wealth until ready to use) 3. Measure of value (how much goods & services worth) Types of Money  Anything people are willing to accept in exchange for goods & services (ex. Animal hides, gems, tobacco). Most familiar type is coins & currency (coins & paper money) Why money has value-people’s confidence in money

7. The Federal Reserve  The Federal Reserve is a central bank established to meet the needs of the U. S. economic and financial system.  The Federal Reserve or Fed was established 1913 by the Federal Reserve Act.  The Federal Reserve acts as a checking account for the U.S. Department of Treasury and controls the Interest Rates charged by commercial banks.

8.  The Fed serves three functions that help to stabilize our financial system 1. affects the flow of money and credit (monetary policy) 2. establishes regulations and acts as a commercial bank supervisor 3. Ensure that the system of paying for all kinds of business transitions works efficiently

9.  The Board of Governors is in charge of the Fed. The Board is located in D.C. and consists of seven members appointed by the president. They serve 14 years terms that are staggered. The Board reports to Congress annually about the state of the economy.

10.  There are 12 Federal Reserve Banks and 25 branches. Each bank has a board of 9 directors. The directors oversee their bank’s operations. Each branch has a board of 5-7 directors.  The Federal Open Market Committee (FOMC) is in charge of the monetary policy of our nation. The FOMC has 12 members. The objective of the monetary policy is to protect the purchasing power of the U.S. dollar.

11. Banking Outline  On a separate sheet of paper, follow the directions below. `1. List and describe the service offered by the following types of banks (pages 658, 667) a. Commercial Bank b. Savings and Loan Bank (S&L Bank) c. Credit Union 2. History of Banking Explain the following events in the history if banking ( p.667) a. National Banking Act b. Federal Reserve c. Great Depression and Banks d. Savings and Loan Crisis e. The Gramm-Leach Bliley Act

12. Create Money  As you now know money comes in a variety of colors, sizes, and designs. You have been hired to design new hundred dollar bills for the country of Rowlandese. The country is concerned about counterfeiting, so they have demanded that at least three security features be included in the design. The rest of the design in left to you to create.  On page 658/526 is a twenty dollar bill form the United States showing the security features. Remember, your design must include at least three of the security features.