You are writing an information guide for young students titled Banking in the United States Made Easy! Explain each of the following terms in your own words.

Currency -

Interest -

Money supply -

Profit -

Stock -

Answer each of the following questions in complete sentences.

Banks are businesses. Like other businesses, they seek profit. How do they earn profit?

Why might an individual want to use a bank? Give an example of why a person would use a bank.

Why might a business want to use a bank? Give an example of why a business owner would use a bank.

What is the Federal Reserve?

The money supply is the total amount of money available in the economy. How do changes in the money supply affect people and businesses?

How does banking affect the money supply?

What would happen if banking didn’t exist?

This chart shows a sequence of causes and effects in how banking can affect society. Complete the chart by selecting the correct word.

First Second Third Fourth Fifth Sixth Seventh Eighth
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?).