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Thursday, May 23, 2013

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Home > Education > The Federal Reserve and You > Chapter 3: Money and Banking 101

The Federal Reserve and You

< Chapter 2: History of Central Banking in the United States Chapter 4: Monetary Policy >
 

Chapter 3: Money and Banking 101

In this chapter, explore the foundations of money and banking in the United States. Learn about the characteristics and functions of money and why money works better than bartering. Find out more about the money supply and two important measures of the money supply — M1 and M2. Discover more about our fractional reserve banking system and how money is created when banks make loans. Finally, delve deeper into price stability and learn about some of the causes and effects of inflation.

Video Segments

What Is Money?
What Is Money? (2:18)

Money Versus Barter
Money Versus Barter (1:52)

The Money Supply
The Money Supply (0:43)

How Banks Make Money
How Banks Make Money (0:52)

Fractional Reserve Banking
Fractional Reserve Banking (2:04)

How Money Is Created and Destroyed
How Money Is Created and Destroyed (1:08)

Central Banking
Central Banking (2:28)

Inflation
Inflation (2:31)

Inflation, Deflation, and Disinflation
Inflation, Deflation, and Disinflation (1:20)

Price Stability
Price Stability (2:44)