Civics Chapter 19

1) pennies 2) nickels 3) dimes 4) quarters 5) half-dollars 6) dollars

Six coins are used in the U.S. today. What are the types of coins?

7

The Board of Directors (Federal Reserve) has how many members?

Washington D.C.

The Board of Directors (Federal Reserve) is managed where?

regulates

The Fed _________(regulates/controls) banks by requiring that they keep a certain amount of money in reserve.

1) They handle the sale of bonds issued by the government/currency put into circulation. 2) Provide various services to state/national banks, & control the banking system.

The Fed was created for two purposes. What were those purposes?

true

*TRUE OR FALSE* Borrowers guaranteed their loans by collateral.

savings banks

- Began in the early 1800s to encourage people who could make only very small deposits to save

savings & loans association

- Created in the mid-1800s to help people purchase homes

credit unions

- Established by people who work for a single co. or belong to a single organization. These are owned/operated by their members. (Ex: State Employees Credit Union)

commercial banks

- Offer a wide range of accounts, most banks in the U.S. are commercial banks - Accounts in commercial banks are insured by a government agency called the FDIC (Federal Deposit Insurance Corporation). Each depositor is insured up to $250,000. If for some reason a bank is unable to give its depositors their money, the FDIC will refund their deposits up to this limit.

paper money

All U.S._____ _____/coins are legal tender.

security

Businesses/individuals rely upon the services/________ of banks to protect and manage their money.

target

Carrying money around made people a ______ for thieves

merchants

_________ will accept a check as payment because they know the bank will honor the check and take the money from your account and pay the person or organization to whom the check was written.

bankruptcy

a legal declaration that a person/businesses can't pay debts owed

credit

a loan of money that is repaid plus interest

currency

another term for coins and paper money

short-term credit

can be especially helpful for emergency purchases

discounting

deducting the interest on a loan in advance

credit unions

established by people who work for a single company or belong to a single organization

long-term credit

loans payable over long periods

creditors

people who are owed money

collateral

property used to guarantee repayment of a loan

discount rate

rate of interest charged to member banks by the Federal Reserve

Federal Reserve System

regulates banks by requiring that they keep a certain amount of money in reserve

1) checking 2) savings 3) CDs 4) money market

types of bank accounts

1) commercial banks 2) savings & loans associations 3) savings banks 4) credit unions

types of banks

savings & loan associations

were created in the mid-1800s to help people purchase homes

14 years

Each member is appointed by the President, with the approval of the Senate. How long is the term that each member serves?

official

Every country has an ________ form of currency.

- Credit cards are more common - Charge cards can only be used in that one specific store when credit cards can be used anywhere

How are charge cards & credit cards different?

- Both are easy

How are charge cards & credit cards similar?

People might not be able to pay off the credit.

How can individual credit be both helpful & harmful?

Borrowers guarantee their loans by signing a piece of paper that show that they will pay off their loans.

How did early borrowers guarantee their loans?

Goldsmiths started keeping gold in safes and people would bring their money to them to buy the gold. Townspeople who needed money would go to the goldsmiths for loans.

How did the first banks originate?

Business loans help the U.S. economy grow because you can better serve your customers, which brings more money to you.

How do business loans help the U.S. economy grow?

overdrawn

If you write a check for more than you have in your account, you are _________ You are then charged with an overdraft penalty from your bank.

savings account

Many Americans set a said an amount per week, month, etc. in a _______ _______.

Treasury Department's Bureau of Engraving & Printing.

Most money issued today is paper money printed in Washington, DC at what building?

money-keeping

People began to carry their money to goldsmiths. Goldsmith began taking their gold and putting it into a safe. Goldsmith had now entered the _____-_______ business, charging a small fee for their service.

interest

People borrowed money from the goldsmith for their loans. They signed a piece of paper promising to repay the loan plus ________ in a certain period of time and paying interest on the money they borrowed.

safe

People had difficulty finding a ____ place to keep money

12

The U.S. is divided into how many federal districts?

interest

The bank pays ________ on all money deposited in a savings account.

deducted

The money is electronically ________ from your account just like a check.

federal government

Today American currency is issued by who?

electronic checks

Today more and more people make payments using a debit card instead of writing checks. They are __________ ______.

penalty

Unfortunately, if you withdraw your money before the time period ends, you may have to pay a _______.

longer

Usually the ______ the money is invested, the higher the interest paid on the CD.

1) 1 2) 2 3) 5 4) 10 5) 20 6) 50 7) 100

What are the different bills that are printed?

They had a lot of money from selling the gold so they were able to give out loans.

What events led goldsmiths to provide money-lending services?

debit cards

What is a popular alternative to carrying cash/checkbook?

A demand deposit account is an account where the bank gives you money when you demand it. A time deposit account is like a savings account, which is when you only draw out money when you need it.

What is the difference between a demand deposit account & a time deposit account?

Some stores wouldn't take some types of currencies.

What problem arose in the U.S. under the Articles of Confederation due to a lack of standard currency & how was it solved?

1) Currency must be easy to carry. It must be small and light so people can carry it with them for everyday use. 2) Currency must be durable (last a long time). It should not wear out too quickly or fall apart. 3) Currency must be made in a standard form and must be considered legal tender by the government that issues it.

What three common features do all currencies have?

mints in Philadelphia, PA and Denver, CO

Where are coins & bills made in the U.S. today?

They aren't issued or guaranteed by the federal government. Businesses accept them because they know that the bank will honor the checks anyways.

Why are checks not considered legal tender, & why do businesses accept them anyway?

They wanted to prevent banks from failing. They did this by requiring that they keep a certain amount of money in reserve.

Why did the U.S. government decide to regulate banks, & how did it do this?

CDs

You invest a certain amount of money for a specified period of time with what?

withdraw

You may ________ the money when it is needed.

checking account

You must have a ________ _______ & enough money in that account to cover the amount of the check.