Chapter+10+HW

Apr 27 - Read 243-248... 10.1 Answer the following questions

1. Describe the three uses of money. Money is anything that serves as a medium of exchange, a unit of account, and a store of value. 2. Explain the six characteristics of money. Its very durable, portable, divisibility, uniformity, limited supply, acceptability. 3. Give examples of **commodity money, representative money,** and **fiat money.** Commodity money consists of objects that have value in and of themselves and that are also used as money. Representative money makes use of objects that have value because the holder can exchange them for something else of value. Flat money has value because the government has decreed that it is an acceptable means to pay debts. 4. Why does the U.S. currency have value?

5. Why did continentals become worthless? 6. What material(s) would you use if you were creating a new United States coin? WHY???? 7. Pretend you live in a society that has a **barter** economy...What difficulties might you encounter in paying for such services as medical care and education?

10.2 Answer the following questions in Short Essay Format...(NOT just a sentence)

1. Describe the shifts between centralized and decentralized banking before the Civil War. Their are some shifts between Centralized and decentralized banking before the Civil War. Centralized banking is when banking was all in one place, the banks would spend your money and it was less organized, while decentralized banking changed before the civil war to a more organize way of banking. 2. Explain how the banking system was stabilized in the later 1800s. The Banking System hasn't always been as stable as it is today. The banking system stabilized in the later 1800's with the FDIC federal deposit insurance corporation which insured people's money up to a certain amount so if the bank fails they will be insured. After the Great Depression the U.S made this system because many people lost all that they had because the banks didn't insure people's money that they had. The banking system is now better than its always been which is great because more people are saving. 3. Describe developments in banking during the 20th century. Banking has been improving for a long time now which is good. The banks of America hold all Americans money. Some banking developments during the 20th century are online banking, FDIC, and safer,more trusting ways to save money have been developed. Bank developments will continue to be improving for a long time which is great because bank improvements will always needed.

1. Money is divided in 2 categories. M1 is money that people can get access to easily. M2 is all assets and value of M1 that can't be spent as money. 2. Financial institutions store and save your money.They also provide loans, mortgages, create profit, and provide credit cards which make it easier and simple. 3. A banks makes money on interest from loans given out. 4. Commercial banks, saving and loan associations, savings banks, and credit unions make up all the types of financial institutes. 5. Online banking has made banking easy and quicker. Most people now a days are staying up to date with technology and trusting the technology system enough to deposit a check at home on your smart phone. It has changed the way banks do business for the better.
 * 10.3 Answer the following Questions**