tailieunhanh - Lecture Business: A changing world (4/e): Chapter 15 - O.C. Ferrell, Geoffrey Hirt

Chapter 15: Money and the financial system. This chapter include objectives: Define money, its functions, and its characteristics; describe various types of money; specify how the federal reserve board manages the money supply and regulates the american banking system; compare and contrast commercial banks, savings and loan associations, credit unions, and mutual savings banks;. | Chapter Fifteen Money and the Financial System Money in the Financial System Finance The study of money: how it’s made, how it’s lost, and why. Money Anything generally accepted in exchange for goods and services. The Functions of Money Medium of Exchange: Accepted as payment for products and resources. Measure of Value: Single standard for assigning and comparing values of products and resources. Store of Value: Means of retaining and accumulating wealth. The Characteristics of Money Acceptability Divisibility Portability Stability Durability Difficulty to Counterfeit Facts About Money The Life Expectancy of Paper Money: $1 years $5 2 years $10 3 years $20 4 years $50 9 years $100 9 years FAST FACT: There is about $525 billion of US currency in circulation, and about two-thirds is held outside of the US. Source: “Fedpoint 1: How Currency Gets Into Circulation,” Federal Reserve Bank of New York – Publications, September 18, 2001, p. 1-2. Types of Money Near Money Savings account | Chapter Fifteen Money and the Financial System Money in the Financial System Finance The study of money: how it’s made, how it’s lost, and why. Money Anything generally accepted in exchange for goods and services. The Functions of Money Medium of Exchange: Accepted as payment for products and resources. Measure of Value: Single standard for assigning and comparing values of products and resources. Store of Value: Means of retaining and accumulating wealth. The Characteristics of Money Acceptability Divisibility Portability Stability Durability Difficulty to Counterfeit Facts About Money The Life Expectancy of Paper Money: $1 years $5 2 years $10 3 years $20 4 years $50 9 years $100 9 years FAST FACT: There is about $525 billion of US currency in circulation, and about two-thirds is held outside of the US. Source: “Fedpoint 1: How Currency Gets Into Circulation,” Federal Reserve Bank of New York – Publications, September 18, 2001, p. 1-2. Types of Money Near Money Savings account Money market account Certificate of deposit Credit card Debit card Traveler’s check Money order Cashier’s check Checking Accounts Check NOW Account A Check Clearing number Bank number Regional bank number This gets put on when the check clears. It represents the dollar amount, in this case, $. Check number Account number Clearing number Bank number Check sum (a number used to verify that everything is correct) Facts About Checks About 13 million US households do not have checking accounts. 180 million checks are cashed annually in 3,700 check-cashing stores for a value of $55 billion. 85% of checks cashed are payroll checks and the average check is about $300. Source: Calmetta Coleman, “Altering Course, Banks Welcome Check Cashers,” Wall Street Journal, July 6, 2001, p. B1. Facts About Credit Cards MasterCard and Visa are the 2 major credit cards. American Express is the dominant Travel &Entertainment credit card Americans hold over $675 billion in credit card debt. Source: .