Transcript Banking and Finance

Banking and Finance
Virginia Standards of Learning
CE.12
The student will demonstrate knowledge of the structure and operation of the
United States economy by
b) explaining the circular flow that shows how consumers
(households), businesses (producers), and markets interact;
c) explaining how financial institutions channel funds from savers to
borrowers;
CE.13
The student will demonstrate knowledge of the role of government in the
United States economy by
d) explaining how the Federal Reserve System acts as the nation’s
central bank
f) recognizing that government creates currency and coins and that there are
additional forms of money.
CE.14
The student will demonstrate knowledge of personal finance and career
opportunities by
e) describing the importance of education to lifelong personal finances;
f) examining the financial responsibilities of citizenship, including evaluating
common forms of credit, savings, investments, purchases, contractual
agreements, warranties, and guarantees.
Student objectives
• Explain circular flow in the economy.
• Explain how financial institutions encourage savings and
investing.
• Explain how the Federal Reserve System acts as the
nation’s central bank.
• Recognize that government creates currency and coins
and that there are additional forms of money.
• Describe the importance of education to lifelong personal
finance.
• Examine the financial responsibilities of citizenship.
Describe circular flow in the economy.
1. Individual and business saving provide
financial capital for borrowing
2. Individuals own resources, sell
resources, and use the income to buy
more resources
3. Businesses buy resources, make and
sell products, and use profits to buy more
4. Government uses tax revenue to provide
public goods and services
List three characteristics of private
financial institutions
1. Includes banks, savings and loans, and
credit unions
2. Receive deposits and make loans
3. Encourage savings and investment by
paying interest on deposits
List four things the Federal
Reserve System does as the
central bank of the United States.
1. Maintain the value of the national
currency (dollar)
2. Regulates banking
3. Manages the amount of money in the
economy to maintain stability
4. Acts as the federal government’s bank
Why do people accept the value of
currency?
Because they have confidence in the United
States government
List the three types of money.
1. Currency
2. Demand deposits
3. Traveler’s cheques
What does career planning
start with?
Self-assessment
What is the relationship between
education and income?
1. Higher skills and/or education levels lead
to higher incomes
2. Employers seek individuals who have
kept pace with technological changes
List six ways to be financially
responsible.
1.
2.
3.
4.
5.
6.
Making careful spending decisions
Saving and investing for the future
Having insurance
Keeping to a budget
Using credit wisely
Understanding contracts, warranties, and
guarantees protect individuals