Deck 20: Money, Financial Institutions, and the Federal Reserve

Question 1

If you were Ben Bernanke, chairman of the Federal Reserve, what economic figures might you use to determine how well you were doing What role did Bernanke play in the recent banking crisis

Answer 1

Following is the list of the economic figures that might be used:
• Gross Domestic Product growth
• Dollar value
• Interest rates
• Industry growth rate
In recent banking crisis, following roles were played by B:
• He took leadership role in monetary policy execution.
• In addition to the decreasing the interest rates he also took a forward step in expanding open market operations.
• He took initiative in working with the bankers all over the world when the market was down.

Question 2

In a small group, discuss the following: What services do you use from banks and S Ls Does anyone use online banking What seem to be its pluses and minuses Use this opportunity to go online to compare the rates and services of various local banks and S Ls.

Answer 2

NO ANSWER

Question 3

Do an Internet search to find the latest articles on the global financial crisis. What has happened to banking in the United States and around the world since 2009 What role has the Fed played in trying to end the crisis in the United States

Answer 3

The one of the reasons for the US crisis in 2008-2009 is the bailout proposal made by the government. The existence of the financial institutions was doubtful at the time of crisis. The banks provided loans to the people who have no valuable assets which is also one of the reasons for the crisis.
The banks realized the mistakes that were done and issues that were overlooked.
• The household prices in the US raised a lot due to the
• GDP growth began to fall
• With the rise in the real estate in US the banks all over the world began to invest
• Imports started to slowdown that led to the worldwide crisis
After 2009 the banking in the United States faced a lot of failures. It is a shocking fact that the banks that were closed before 2008 were increased to the banks after 2008. That is nearly 10 banks were closed before 2008 and more than 460 banks after 2008. This showed the effect on the entire world economy. With the failure of the banks the insurance sector is also affected.

Question 4

How much cash do you usually carry with you What other means do you use to pay for items at the store or on the Internet What trends do you see in such payments How might those trends make your purchase experience more satisfactory

Question 5

Poll the class to see who uses a bank and who uses a credit union. Have class members compare the services at each (interest rates on savings accounts, services available, loan rates). If anyone uses an online service, see how those rates compare. If no one uses a credit union or online bank, discuss the reasons.

Question 6

How many search items have appeared covering this issue What does the number of articles tell you about the importance of this issue

Question 7

If the value of the dollar declines relative to the euro, what will happen to the price of French wine sold in U.S. stores Will people in France be more or less likely to buy a U.S.-made car Why

Question 8

One role of the Federal Reserve is to help process your checks. In small groups discuss when and where you use checks, credit cards, debit cards, and cash. Do you often write checks for small amounts Would you stop if you calculated how much it costs to process such checks Have you switched to debit cards as a result Discuss your findings with the class.

Question 9

Develop your own story about the causes of the banking crisis. Talk to others in the class and compare stories. What organizations share the blame for the crisis

Question 10

Do you keep your savings in a bank, an S L, a credit union, or some combination Have you compared the benefits you could receive from each Where would you expect to find the best loan values

Question 11

Form several smaller groups and discuss the recent banking crisis. How has it affected the people in the class What has happened to banks and the economy in general since the start of the banking crisis What have been the political implications of recent economic changes

Question 12

Write a one-page paper on the role of the World Bank and the International Monetary Fund in providing loans to countries. Is it important for U.S. citizens to lend money to people in other countries through such organizations Why or why not Be prepared to debate the value of these organizations in class.