OVERVIEW, LEARNING OBJECTIVES, CLASS PREPARATION

CHAPTER 18-Understanding Money, Banking and Credit

OVERVIEW
Students must understand the basics of monetary and banking systems before they can absorb the more advanced concepts involved in financial management. Therefore, this chapter on money, banking, and credit introduces Part VII, “Finance and Investment.” This same basic understanding of money, banking, and credit can make students more informed consumers. We begin with the principles of money: what money is, how it functions in a society, and what characteristics are essential for any medium of exchange. We explain two commonly used measures of the money supply: M1 and M2. Next, we turn to the functions of the Federal Reserve System. Then we examine the network of commercial banks, savings and loan associations, credit unions, and other institutions that provide financial services in this country. We examine recent innovations in banking. We also look briefly at the regulatory activities of the Federal Deposit Insurance Corporation and the National Credit Union Association (NCUA). We conclude the chapter with a discussion of effective credit management and how one gets money from a bank or lender. We introduce the “five C’s” of credit: character, capacity, capital, collateral, and conditions. We identify sources of credit information for both business firms and individuals and the collection procedures that can be used to collect past-due accounts.

Format for Discussion Questions: Typed, (Question in bold) followed by double space and then your answer.
Assignments may be submitted in class paper copy, email, or via Blackboard.
Late assgnments will recieve a maximum of 50% credit

CLASS PREPARATION

READ Chapter 18,Video Case 18.1 Be prepared to discuss the questions at the end of the case
Answer Discussion Questions 1,4,7

CROSSWORD CLUES

CROSSWORD BOARD