Explain each of the following terms in your own words.
Currency - Currency is a word for ‘money’ that can be used in a particular country
Interest - You are paid with money at the same rate to make up for a loss of money or “a loan”.
Money supply - The amount of money a person or a country has
Profit - Profit is the amount of money you make, when you take away the costs of taxes and things like food or clothes, the leftover money would be your “profit”.
Stock - The goods/materials of a business that are being sold and displayed to be sold.
Answer each of the following questions in complete sentences.
Banks are businesses. Like other businesses, they seek profit. How do they earn profit?
Banks offer mostly services and practically no goods. Banks allow depositors to earn interest on their money, and that they can supply borrowers with loans to shop for houses, cars, etc. The interest from these loans is one in all thy ways they profit.
Why might an individual want to use a bank? Give an example of why a person would use a bank.
An individual would want to use a bank thanks to some reasons. One is that it's a secure place to stay. another excuse is that there's an interest once you put your money during a bank. which suggests your money will still grow
Why might a business want to use a bank? Give an example of why a business owner would use a bank.
A business might want to use a bank so as to possess a safer and surer thanks to keep and monitor money. The price of using a bank to a particular business owner is that you just need to pay the bank to keep your money. the advantages would be that the money is bound and withdrawing and depositing is convenient. as an example, if money isn't kept during a bank and when there's a disaster like fire, the money is burnt with the establishment.
What is the Federal Reserve?
The federal banking authority within the US that performs the functions of a financial organization and is employed to implement the country's monetary policy, providing a national system of reserve cash available to banks. Created in 1913, the FRS System consists of twelve central bank Districts, each having a Fed Bank. These are controlled from Washington, DC, by the Fed Board consisting of governors appointed by the US president with Senate approval.
The money supply is the total amount of money available in the economy. How do changes in the money supply affect people and businesses?
Changes within the funds affect people and businesses in an exceedingly form of way. the scale of the money supply can increase and reduce the price of borrowing or the speed of interest thus making it easier or harder for businesses and individuals to borrow money. Also the scale of the cash supply or a nation's monetary policy can influence inflation and therefore the growth of an economy which influences both individuals and businesses yet.
How does banking affect the money supply?
Banking affects the money supply by making it easier to stay track of your money, holding your money till you wish to use it, or it can make it to where you'll be able to automatically use your money once you don't want to use it which may make someone not want to use a bank in any respect.
What would happen if banking didn’t exist?
If banking didn't exist people wouldn't be able to make checks or keep track of their money, people would must keep their money on them in any respect times, or people would be stolen from more frequently, and wouldn't have credit or debit cards to carry all of their money on.
This chart shows a sequence of causes and effects in how banking can affect society. Complete the chart by selecting the correct word.
First
More
Second
Fewer
Third
Increases
Fourth
More
Fifth
Increase
Sixth
More
Seventh
True
Eighth
Increase
The Fed reduces interest rates.
Banks will make (more or fewer?) loans.
The money supply (increases or decreases?).
People and businesses are (more or less) likely to spend and borrow money.
The number of jobs will (decrease or increase?).
People will buy (more or fewer?) cars, homes, and fun stuff.
Growth of the economy speeds up.
Inflation will (decrease or increase?).
Explanation:
Here it is
