Banks, Credit & the Economy
This lesson presents a crash course in the relationship between money, banks, and lending in our economy. Students first learn the basics about money and banks. Then they then learn about banks’ role as lenders and find out why lending plays such a huge role in our economy. Students learn about the Federal Reserve, inflation, and the Fed’s role in regulating our economy. Finally, they learn the difference between loans that serve as investments and loans for things that decrease in value, as well as the ugly side of borrowing and lending.
Students will be able to...
- Describe the role of the Federal Reserve as the nation’s central bank.
- Explain the impact of banks and the Federal Reserve on the money supply and the national economy.
- Identify the importance of saving and borrowing in the U.S.
- Identify the role of banks in channeling funds from savers to borrowers.
- Explain that the government creates currency and coins and that there are additional forms of money.
- Describe the advantages and disadvantages of using credit.