Debit Cards

Debit cards look like credit cords, but they work a lol differently. Instead of purchasing goods on credit. the debit card transfers money diroctly from the cardholder's bank account to the seller's account. Debit cards work on the principle of "buy now. pay now." Talk with several people who have both a debit card and a credit card. Ask them to discuss the pros and cons of each lype of card. Present your findings in Lhe form of a chart.

of financial services, including banking, insurance, and securities. Some analysts believe that the act will lead co the formation of "universal banks" that oiler a full range of financial services. Critics of the law warn that the act may in due course weaken competition for financial services in the United States. Others caution that the act will lead to more sharing of customer information among the affiliated companies, therefore damaging protection of privacy.

Explaining Why did deposit insurance develop in the 1930s?


Checking far Understanding

1. Key Terms Define the following terms and use them in sen Lences related Lo Lhe banking industry: checking account, savings account, certificate of deposit (CD).

Reviewing Main Ideas

2. Describe What advantage do savings accounls have over certificates of deposit?

3. Explain Why must banks keep a reserve?

Critical Thinking

4. Evaluating Information If your goal was to get the highest inter esL rale for your savings, whal kind of account would be best?

5. Understanding Cause and Effect In a graphic organi7er like the one below, show how banks make money.

What Banks Do: Result:

What Banks Do: Result:

Analyzing Visuals

6. Explain Study the photograph that appears on page 535. Write a paragraph explaining whal is happening in the picture.


7. Compare Obtain brochures from at least three banks that explain Lhe banks' services Lo cusLomers. How are they alike? How are they different?


Assessment & Activities

Itevtott to Learti

Section 1

» Money is a part of the broad financial system, and it serves three functions. It is a medium of exchange, a store of value, and a measure of value.

Section 2

♦ The Federal Reserve wields a great deal of power in our economy. It serves as the nation's central bank, it controls monetary policy, and it regulates commercial banks.

Section 3

- Banks provide services to consumers, such as savings and checking accounts, and they make a profit by lending money to consumers.


Using Your Foldables Study Organizer

Use your completed foldable to create a 10-question quiz. Prepare an answer key on a separate sheet of paper. Trade quizzes with a classmate and then grade each other's answers.

Reviewing Key Terms

Write the key term that best matches each definition helow.

1. the policy that involves changing the rate of growth of the supply of money in circulation

2. a bank whose main functions are to accept deposits and lend money

3. a certain percentage of deposits that banks have to set aside as cash in their own vaults or as deposits in their Federal Reserve district bank

4. paper money issued by the Federal Reserve

5. the most powerful agency of the Federal Reserve System

6. financial institutions that traditionally loaned money to people buying houses

7. a federal corporation that insures individual accounts in financial institutions up to $100,000

8. a bank that can lend money to other banks in times of need

9. the interest rate the Federal Reserve charges on its loans

10. an account in which customers receive interest based on how much money they have deposited

Reviewing Main Ideas

11. Name two forms of money in addition to currency and coin.

12. What is the purpose of the Federal Deposit Insurance Corporation (FDIC)?

13. Who controls the Federal Reserve System?

14. What are the two main regulatory functions of the Fed?

15. What kind of account requires the deposit to remain in the bank for a certain period of time?

16. In what kind of account do savers have the most control over their money?

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Critical Thinking

17. Drawing Conclusions If you read in the newspaper that the Federal Reserve had just lowered the discount rate, what might you conclude about the economy?

18. Organizing Information In a graphic organizer like the one below, explain the reasons for the Federal Reserve's effectiveness in using monetary policy.

Practicing Skills

19. Reading a Time Zone Map Study the map on page 528. It takes two hours to fly from Denver. Colorado, in the mountain time zone to Chicago, Illinois, in the central time zone. If you leave Denver at 2 a.m. Friday, what time wi11 it be in Chicago when you arrive?

Analyzing Visuals

20. Look at the graphs on page 532. What effect does selling bonds have on interest rates?

Economics Activity

21. For two days, keep track of any time you use money, see money used, or see dollar values written out somewhere. Try to determine in each instance which of the functions the money is serving.


22. During the 1930s, the United States underwent a tragic economic depression. Work in groups to research the following aspects of daily life.

• What happened to income and prices?

• What happened to savings accounts?

• What happened to the availability of jobs?



Self-Check Quiz Visit the Civics Today Web site at :orr and click on Self-Check Quizzes— Chapter 24 to prepare for the chapter tost.

Each member of your group should research one of the three questions. Then summarize the group's notes to develop a presentation that describes what actually happened during the Great Depression.

fT Technology Activity

23. On the Internet, go to the Federal Reserve education Web site at www.federalroservg education.ora/. From the -'Choose a Category"' drop-down menu, select "Resources and Research." Then click on "Economic Literacy Project." On the right side of the Web page under "Test Yourself," click on "Mpls. Fed's economic literacy quiz." Take the quiz and see how you do. What did you learn about the economy by taking the test?

Standardized Test Practice

Direction»: Choose the best answer to the following question.

If the reserve requirement is 5 percent, how much of a $100 deposit may a bank lend? F $5 <3 $95 H $100 J $50

Test-Taking Tip

Remember that a reserve requirement is the percentage of a deposit that a bank must put aside and not use for loans.

Step 2 Fold up the bottom edges of the paper to form four tabs.



Government expenditures are used to build and maintain 540 transportation systems such as "The Big Dig" in Boston. ^

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Step 1 Collect tv/o sheets of paper and place thern about 1 inch apart

Keep the edges straight.


If you borrow money because you spend more dian you earn, you run a deficit. You have a responsibility to repay the sum you borrow. In this chapter, you will learn how federal deficits and surpluses influence the United States economy.

To I earn more about government expenditures and revenues, view the Economics & You video lesson 4: How Government Spends, Collects, and Owes.

Foldablesj step 3 when all the tabs are the same size, crease the paper to hold the tabs in piace and staple the sheets together. Label each tab as shown. Then cut the three lower tabs in half, forming six tabs.

Staple together along the fold.




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Government expenditures are used to build and maintain 540 transportation systems such as "The Big Dig" in Boston. ^

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Government Finances organizing information study Foldable Make the following foldable to help you organize what you learn about financing our government.

Reading and writing as you read the chapter, use your foldable to write what you learn about the revenues and expenditures of governments in the united states under each appropriate tab.

Step 1 Collect tv/o sheets of paper and place thern about 1 inch apart

Keep the edges straight.

Step 2 Fold up the bottom edges of the paper to form four tabs.

Chapter Overview Visit tho Civics Today Web site at and click on Chapter Overviews-Chapter 25 Lu preview chapter intnrrnatinn.

Managing Your Money At All Ages

Managing Your Money At All Ages

Money management is an art. Sadly, it is becoming a lost art. We are becoming poorer each day just because we cannot manage the resources that we have so painstakingly accumulated. We don’t know how to manage our assets and nurture them to grow.

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