Banking and Monetary Policy

TOPIC I: Money & The Banking System

1. define the criteria for a medium of exchange
2. explain the different kinds of money
3. define liquidity and how it applies to money.
4. define and describe the different functions of money.
5. analyze the functions of financial intermediaries.
6. define and describe the different kinds of banks.
7. define and describe the Federal Reserve (FED) and it's purpose.

 KNOW THE FOLLOWING TERMS

money	liquidity
demand deposits	M-1
M-2	M-3
financial intermediaries	commercial bank
treasury bill	state bank
national bank	Federal Reserve
fractional reserve banking

KEY CONCEPTUAL QUESTIONS

1. What is money?
2. How is money to be defined in the United States?
3. What backs the U.S. dollar?
4. What is a bank?
5. What are the functions of the Federal Reserve System?