1.In a short paragraph, define money. Discuss two characteristics of the money used in the US today. Explain what would happen if commodity money like corn or cotton was used in the US today instead of out currency.

2.List three types of modern banks in the US. Discuss one way that modern banks offer electronic banking to their customers. Explain whether you think electronic banking is a good thing or a bad thing.

3.In a short paragraph, define the Federal Reserve. What is one service the Fed offers to banks or the Federal Government? What would happen if modern banks were not offered the services that the Fed gives them today?

While have already losemed that in terms of goods and services, equilibrium is the point at which supply and demand are balanced. In other words, It is the balance between the price and quantity supplied. And market equilibrium is when the quantity demanded at a curtain price is equal to the supply at that price. But we also know that more often than not, the point of a good's or market's equilibrium is off, a good or market is in disequilibrium, or a period where the quantity supplied does not equal the quantity demanded. Therefore, there is a level of inefficiency and a surplus (too much supply, not enough demand) or shortage (too much demand, not enough supply) may occur. Disequilibrium occurs for many reasons like a change in supply or a fall in demand of goods or servos. D, D2 S Price Quantity But, what about when you are talking about the economy as a whole, not just a particular good or a particular market of goods? Aggregate Supply (AS] is the sum of all the supply in the economy. This is the total amount of goods and services that producers will manufacture at each price level. It is not like regular supply of a particular good or market supply of a certain type of good. Basically, It is the supply total of the whole economy. Economists are able to find aggregate supply by adding all goods and services made and sold in the economy together and they averaging them to find the average supply. Then, they figure out the price level, or average of all the prices in the economy for goods and services. Finally, aggregate supply is found by combining the average supply and price levels together. Aggregate demand (AD) is the sum of all the demand in the economy. Basically, It is the total of all goods and services demanded by households, businesses, and the government at all different price ranges. It is not like regular demand or market demand which just deals with one good or one market of goods. So 25 prices for ourtain goods rice or fall, the overall demand will change because consumers or businesses will adjust the quantity In which they will buy. For example, If price levels fall, a consumer will have more purchasing power and will purchase (demand) more goods or greater quantities of those goods. So, aggregate demand will go up. But, as price levels ruse, people lose their purchasing power This then causes a decrease In the quantity of goods and services that are demanded. With aggregate supply and aggregate demand combined together, 2 balancing point needs to be found. Macroeconomic equilibrium is when the quantity of aggregate demand equals the quantity of aggregate supply. It the balancing point between the two. For example, as price levels change in the economy it affects aggregate supply. This is because, producers will respond by adjusting their output, or quantity supplied each year. So, If price levels rise, producers will supply more goods and services because there is a greater profit to be made. Therefore, aggregate supply rises. But, If price levels fall, producers will produce less because profits decrease so quantities supply will fall. This will lead to falling aggregate supply. At the same time, consumers are trying to adjust their aggregate demand to balance the aggregate supply. Until a balance is established, the economy is in disequilibrium. Once the economy finds the macroeconomic equilibrium it is efficient and running smoothly. AD AS Price Level m Real GDPARD OF GOVERNO SYSTEM BAL RESSKY We have now learned about the foundations of the banking system from the Constitution assigning Congress the power to coin money to the creation of the Federal Reserve we still use today. The Fed serves many purposes both with the Federal government and smaller privately owned banks. Modern banks today fall into a few different types of categories. And banking today has changed in a variety of ways, especially in terms of providing services to their customers. And electronic banking has evolved, making it more convenient for customers to do many transactions without the help of a person. So, what are the purposes of the Federal Reserve? What roles does the Fed play in private and smaller banks? What are the different types of banks that exist today? How has banking changed in terms of providing services to their customers? And how has electronic banking impacted banking customers today?Before we begin, let's review some of the vocabulary words that we will see in the lesson. Terms Definitions Automated Teller Machines electronic device that lets bank customers deposit, withdraw, and check on balances (ATM) in their bank banks financial institution that takes deposits and makes loans for a profit central bank is a country's money authority check clearing service a process where the Fed records expenses of bank clients and determines if a bank customer has the funds to make a check into real cash commercial banks largest and oldest banks which provide many services like checking, depositing, and loaning to mostly businesses credit union cooperative lending groups which are specifically organized for mortgages and auto loans; don't make profits debit card a card that is linked to a customer's account and can even withdrew money from the machine Electronic Funds Transfer Systems (EFT) computerized banking system Federal Reserve (The Fed) the United States central bank online banking system system where banking is able to be done online using the bank's website or even an app on a smart device Required-Reserve Ration (RRR) the fraction of a bank's deposits that it must keep in reserve savings and loan banks banks who allow customers to save/acquire loans for a large purchase, usually of a home, while making a profit Truth in Lending Act 1968 law that required banks to present certain information to borrowers like annual percentage rates, terms, and total costs of loans