1. Checking Unit What Is Money?

2. Money Medium of exchange Measure of value Storing

3. Types Currency/coin Checks Credit card Electronic transfer

4. Checking Accounts/Demand Deposit Interest bearing checking account Non-interest bearing Standard Accounts – set monthly fee Special Accounts – college students – small # of checks written – no min. balance Who insures these accounts? For how much?

5. Terms Passbook/checkbook Account Statement. Reconciliation-the process of finding the correct ending balance of a checking account. Trustee EFT/Debit Card/ATM Direct Deposit

6. Terms Clearing a check/canceled check. –Can you always cash a check whenever you want? Stop payment order. ($10) Floating a check. Bounced check. Outstanding check. Safe deposit box.

7. Federal Reserve Banks 12 The banker’s bank Federal Reserve Chairman:

8. What They Do Acts as central bank – issues currency. Bank for U.S. Govt. - Processes tax refunds, transfer payments, etc. Examines books of financial institutions. Protects consumers – truth in lending law – free pamphlets and info. Regulates nations money supply.

9. Monetary Policy Regulating the size of the money supply. Reserve Requirements: The % of deposits the institution must maintain in its vaults. A lower reserve requirement means banks have more $ available to make loans. Consumers have more $ to spend. Demand for goods go up. Discount-rate policy – Interest rate charged by Fed to member banks. Lower rate = more borrowing.