About This Chapter
Fundamentals of Money & Banking - Chapter Summary
This chapter provides you with short and in-depth lessons about topics including the definition of money, the four functions of money, the money demand, the ways the government protects your money during a crisis and much more. When you've finished the lessons, you can demonstrate the information you remember by taking brief multiple-choice quizzes. Other topics that are included in this chapter are here:
- Bank lending as a way of making money
- Formula for multiplier effect
- Money demand curves of the money market
- Institutions within the United States banking system
- Excess reserves of the fractional reserve system
- Technology's positive impact on banking
- International banking
- The World Bank and other international banking associations
This mobile-friendly chapter allows you to review any topic you'd like. Print out the worksheets and answers to quiz yourself while you're away from your electronic devices. There are links within the quizzes to go back to specific topics in the lessons. Use the video tags located beneath each video to visit different topics.
1. What is Money? - Definition and Types
In this lesson, you'll learn what money is and its four basic functions. You'll also take a look at how it benefits society and explore the different types of money.
2. The Four Basic Functions of Money
This lesson uses real-world examples to describe the four basic functions that money serves in an economy. These basic functions help to create the foundation of the money system.
3. How Money Is Made: Understanding Bank Lending in the Economy
In this lesson, you'll learn how a single deposit in a local bank increases the money supply and filters through the economy with the help of the fractional reserve banking system.
4. Money and Multiplier Effect: Formula and Reserve Ratio
In this lesson, explore the concept of the multiplier effect and the money multiplier. Then, learn the formula for calculating changes in the money supply.
5. Money Demand and Interest Rates: Economics of Demand
Learn about the differences between money, wealth and income and explore the factors that determine the demand for money in an economy. Take a look at the demand curve for money as well.
6. The Money Market: Money Supply and Money Demand Curves
This lesson explores an economic model describing the supply and demand for money in a nation, referred to as the money market. It also describes the central bank's role in controlling the money supply, which impacts interest rates and the greater economy.
7. Institutions of the U.S. Banking System
The United States banking system is diverse and consists of many different types of institutions. In this lesson, you'll learn about commercial banks, savings and loan associations, credit unions, and investment banks.
8. Fractional Reserve System: Required and Excess Reserves
This lesson provides an overview of basic banking concepts, illustrating how deposits turn into required reserves and excess reserves. It also covers how a bank accounts for these items on its balance sheet.
9. How the Government Protects Your Money During a Financial Crisis
In this lesson, you'll learn about some of the causes of the financial crisis of 2008 that brought us the Great Recession. You'll also learn what steps the federal government can take to help protect your money when the next financial crisis hits.
10. How Technology Makes Banking More Efficient
If you've ever heard the cliché 'banker's hours,' you know that banking traditionally has not been a fast and efficient process. In this lesson, you'll learn about how technology has improved the efficiency of banking for customers.
11. International Banking and Services
Business never stops in the global economy. Companies need banking services 24 hours a day on different continents. In this lesson, you'll learn about international banking, including services provided and types of banks.
12. The World Bank, IMF & Other International Banking Organizations
International banking and financial organizations exist to encourage economic and financial stability, help facilitate trade, and help with economic development. In this lesson, you'll learn about some of these important organizations.
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Other chapters within the GACE Business Education (542): Practice & Study Guide course
- Ethics in Business
- Understanding Contract Law
- Government Regulation of Business
- The Ethics of Advertising, Marketing & Privacy
- Property Law Basics
- Employment Law
- Collective Bargaining & Unions
- Workplace Communication
- The Central Bank & Monetary Policy
- Economic & Political Systems
- Basics of Economics & Finance
- Economic Indicators
- Fiscal & Monetary Policies in Economics
- International Trade Laws & Regulations
- Financial Management & Planning
- Principles of Personal Finance
- Securities Market Basics
- Creditors' Rights in Business Law
- Negotiable Instruments
- Insurance & Managing Risk
- Business Planning & Organizational Design
- Organizational & Group Behaviors in Business Management
- Management Styles & Theory
- Leadership and Management
- Motivation in Business Management
- Strategic Decision Making & Problem Solving
- Work Groups & Teams
- Human Resources Basics
- Employee Benefits
- Production & Operations Management
- Computation in Business
- Basic Statistical Analysis for Business
- Quantitative Analysis in Business
- Accounting Fundamentals
- Customer Relationship Strategies & Maintenance
- Starting a New Business
- E-Commerce Business Models
- Use of Information Systems in Business
- Business Software
- Network Systems Technology Overview
- Information Security & Protection
- Career & Professional Development in Business
- GACE Business Education Flashcards