Materials

  • CCB Mathematics pages 202 - 207

Standards

Objectives

  • Identify the functions of money and types of money

  • Recognize the components of the US money supply

  • Describe the role of banks and other financial institutions in the US economy

  • Explain how the US government regulates the banking system

Key Concept

  • Banks and other financial institutions connect people who want to save money with people who want to borrow money in a regulated US financial system

Vocabulary

Tier 2 Credit Union
Money Supply
Savings Institution
Tier 3 Commercial Bank
Federal Reserve System
Flat Money
Test Words Adequate

21st Century Skill

  • Global Awareness: With students, go online to search for current exchange rates. Explain how the rates work by comparing the amounts of each currency and the base currency that the others are measured by. When students have completed the sidebar activity, invite them to share their examples with the class. Have them explain why you pay more to buy a currency than you receive when you sell it.

Writing Practice

  • Remind students to vary the words they use to express cause and effect. Have them underline the cause-and-effect terms in their paragraphs. Ask them to use different terms to replace any repetitions.

Before Lesson

Ask students to recall news items they have heard or read that were about financial institutions. (They might mention changes in mortgage interest rates, controversies about bonuses for upper management, issues relating to home foreclosures, problems with credit card debt, etc.)

Background

Guided Ask students to identify different types of financial institutions in the United States (banks, credit unions). Invite volunteers to share what they know about such institutions. Use their comments to create a list of institutions and a brief description of each. Tell students that financial institutions have two basic functions: providing means of saving/investing and providing loans. Help students recognize the relationship between the two functions.

Guided Practice

  • Money and Its Uses
    • Functions of Money
    • Types of Money
  • The Money Supply
  • Financial Institutions
    • Commercial Banks
    • Savings Institutions
    • Credit Unions
  • Government Oversight of Financial Institutions
    • Federal Deposit Insurance Corporation
    • The Federal Reserve System
    • Other Agencies

Core Skill

Evaluate Evidence: Have students complete this activity in pairs or small groups and then poll the class to compare answers. Resolve any differences as a class by evaluating the evidence in the passage.

Distinguish Fact from Opinion: Group students who wrote about the same institutions and have them compare and contrast the facts and opinions they found. Invite them to share interesting discoveries with the class.

Extension

Summarize a Paragraph: Read to students the second paragraph under the heading The Federal Reserve System on page 205. Then go over the material again, using simpler language. Explain, for instance, what the word panic means in this context. Have students write a sentence summarizing the paragraph.

Distinguish Different Measurements: Have students investigate other ways that economists measure the US money supply and differentiate between them. For example, M2 and M3 include savings accounts, stocks, bonds, and retirement accounts. Challenge students to determine why these types of money are not included in the Ml money supply. Have them write a paragraph supporting their interpretation.

Lesson Review