Ch 25: Money and Financial Institutions

About This Chapter

Watch video lessons about money and financial institutions and learn about different financial reserves, the money market, the U.S. banking system, and more. These lessons represent only a small portion of our business course materials.

Money and Financial Institutions: Chapter Summary and Learning Objectives

Understanding money, financial reserve systems, and the United States banking system are not only part of the foundation for creating a successful business, but are also important for increasing an individual's standard of living and personal wealth. In this chapter, our instructor discusses money and the monetary system, different types of financial reserve systems, private investment and real interest rates, the financial tools and policies of the U.S. banking system, and the roles of the government and technology in the marketplace of monetary exchange. In addition, students will be introduced to several important vocabulary terms in order to help them grasp all the different aspects of this complex topic. At the end of this chapter, you should be to:

  • Define money and explain its four basic functions
  • Describe the Fractional Reserve System and the Federal Reserve System
  • Understand the money market's supply and demand curves
  • Describe the U.S. banking system and identify its main institutions
  • Explain how the government protects your money and how technology improves banking
  • Evaluate the importance of the World Bank and the International Monetary Fund

Video Objective
The Four Basic Functions of Money Learn the four basic functions of money.
Money and Multiplier Effect: Formula and Reserve Ratio Understand the Money Multiplier and be able to use it to calculate cumulative changes in the supply of money.
Private Investment and Real Interest Rates Identify the impact of changes in interest rates on loanable funds' supply and demand and drive investment.
What is the Federal Reserve System? Learn about the monetary goals and responsibilities of the central bank.
Reserve Requirement, Open Market Operations and the Discount Rate Understand the central bank's three main tools.
Institutions of the U.S. Banking System Know the institutions of the U.S. banking system, including ex-commercial banks, credit unions, savings and loans associations, and nonbanks.
How the Government Protects Your Money During a Financial Crisis Understand the causes of the banking crisis of 2008-2009 and funds are protected by the government during crises like this.
How Technology Makes Banking More Efficient Describe how technology improves banking efficiency.
International Banking and Services Evaluate the role and importance of international banking.
The World Bank, IMF & Other International Banking Organizations Explain the role of the World Bank, International Monetary Fund, International Bank for Reconstruction and Development, and Bank for International Settlements.

10 Lessons in Chapter 25: Money and Financial Institutions
Test your knowledge with a 30-question chapter practice test
The Four Basic Functions of Money

1. 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.

Money and Multiplier Effect: Formula and Reserve Ratio

2. 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.

Private Investment and Real Interest Rates

3. Private Investment and Real Interest Rates

When you borrow money, where does that money come from and why is it available? In this lesson, you'll learn about the market for loanable funds, where savers deposit money and entrepreneurs borrow money to finance private investment.

What is the Federal Reserve System?

4. What is the Federal Reserve System?

Have you ever wondered why interest rates go up and down, seemingly at random? Of course you have! Discover what the Federal Reserve is, what its goals are and how those goals are achieved in this introductory lesson explaining the central bank of the United States.

Reserve Requirement, Open Market Operations and the Discount Rate

5. Reserve Requirement, Open Market Operations and the Discount Rate

This lesson outlines the three main tools used by the central bank to conduct monetary policy, including open market operations, required reserves and the discount rate.

Institutions of the U.S. Banking System

6. 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.

How the Government Protects Your Money During a Financial Crisis

7. 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.

How Technology Makes Banking More Efficient

8. 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.

International Banking and Services

9. 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.

The World Bank, IMF & Other International Banking Organizations

10. 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.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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