Tuesday, March 22, 2011

Money & Banking


Students shall be able to

  1. List and explain the three functions of money.

  2. Define the money supply, M1 and near monies, M2, and M3.

  3. State three reasons why currency and checkable deposits are money and why they have value.

  4. Identify two types of demand for money and the main determinant of each.

  5. Describe the relationship between GDP and the interest rate and each type of money demand.

  6. Explain what is meant by equilibrium in the money market and the equilibrium rate of interest.

  7. Explain the relationship between bond prices and the money market.

  8. Describe the structure of the U.S. banking system.

  9. Explain why Federal Reserve Banks are central, quasi public, and bankersí banks.

  10. Describe seven functions of the Federal Reserve System and point out which role is the most important.

  11. Summarize and evaluate the arguments for and against the Federal Reserve System remaining an independent institution.

  12. Describe the conditions that have caused the loss of market share of banks and thrifts to pension funds, insurance companies, mutual funds, and securities-related firms.

  13. Identify three major changes continuing to occur in the financial services industry.


  1. Activity 35 from the NCEE AP Macro curriculum.


  1. Complete "What's All This About the Ms?"


Monitor and adjust to check understanding.