HOLT American Civics Chapter 19 Managing Money Section 1: Section 2: Section 3: Section 4: ‹#› Money and Credit Banks and Banking Saving and Investing Insurance Against Hardship HOLT, RINEHART AND WINSTON HOLT Chapter 19 American Civics Section 1:
Download ReportTranscript HOLT American Civics Chapter 19 Managing Money Section 1: Section 2: Section 3: Section 4: ‹#› Money and Credit Banks and Banking Saving and Investing Insurance Against Hardship HOLT, RINEHART AND WINSTON HOLT Chapter 19 American Civics Section 1:
Slide 1
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 2
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 3
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 4
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 5
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 6
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 7
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 8
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 9
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 10
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 11
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 12
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 13
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 14
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 15
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 16
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 17
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 2
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 3
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 4
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 5
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 6
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 7
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 8
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 9
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 10
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 11
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 12
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 13
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 14
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 15
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 16
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON
Slide 17
HOLT
American Civics
Chapter 19
Managing Money
Section 1:
Section 2:
Section 3:
Section 4:
‹#›
Money and Credit
Banks and Banking
Saving and Investing
Insurance Against Hardship
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
OBJECTIVES
What are the four basic characteristics of
currency?
Why do people and businesses accept checks
as payment instead of cash?
How is credit important in families and in the
economy as a whole?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Four basic characteristics of currency:
Must be easy to carry and take up little space
Based on system of units easy to multiply and
divide
Must be durable
Must be in a standard form and guaranteed by
the government
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
Why do people and businesses
accept checks?
Much of the U.S. money supply is in the form
of bank deposits.
A check is a promise of funds sufficient to
cover stated amount.
Insufficient funds and overdrafts are punished
with fines or criminal penalties.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 1: Money and Credit
The Importance of Credit
Credit allows wholesalers to buy a larger quantity
of goods at once.
Families use credit for emergency purchases and
large purchases.
Credit enables consumers to buy when
production is high and goods are being sold.
Consumer spending encourages economic
growth.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
OBJECTIVES
What is the FDIC, and how does it help
depositors?
What caused the savings and loan crisis in the
1980s?
How and why does the Federal Reserve System
regulate the amount of money in circulation?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The FDIC:
FDIC—Federal Deposit Insurance
Corporation
A government agency
Insures accounts in commercial and savings
banks for up to $100,000
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The savings and loan crisis:
1980s—many of the banks involved in risky
‹#›
loans, bad investments, and fraud
Hundreds of the banks failed
The FSLIC ran out of money, and debt was
passed on to the FDIC.
The Resolution Trusts Corporation was
established to sort out the crisis.
1999—cost to taxpayers estimated at $165 billion
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 2: Banks and Banking
The Federal Reserve System
regulates the money in circulation:
Regulation prevents bank failure.
The Fed controls money circulation to keep the economy
healthy.
The Fed buys government bonds from banks and individuals
to increase circulation and speed economic growth.
The Fed sells government bonds to take money out of
circulation when economy grows too fast.
Member banks can borrow money from the Fed to increase
their reserves.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
OBJECTIVES
Why is it important to save money?
What are some ways people save and invest
their money?
How does saving money help the U.S.
economy?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
The importance of saving money:
People save for education, emergencies,
retirement, and large purchases.
Credit purchases often require a down
payment in cash.
Ability to make a large down payment reduces
monthly payments and the total interest on a
loan.
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Ways of saving and investing:
Purchasing items that may increase in value
Regular installments to a savings account that is
earning interest
Certificates of deposit (CDs)—interest is paid when
CD matures
Stocks—common and preferred stock; mutual funds;
money market funds
Bonds—low risk; money and earned interest is
returned when bond matures
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 3: Saving and Investing
Saving money helps the U.S. economy:
Expansion of the economy requires capital; money in
‹#›
savings is used for expansion.
Money saved is also money invested in the economy.
Companies’ ability to raise capital promotes the
country’s prosperity.
Banks use money in savings to make loans to
businesspeople.
Businesses that save are able to reinvest in
themselves.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
OBJECTIVES
How are insurance companies able to cover
the hardship costs of so many people?
What is the difference between private
insurance and social insurance?
Why was Social Security created, and why are
some people concerned about its future?
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Insurance companies cover many people:
Premiums are collected from millions of
‹#›
policyholders.
Money is held in a reserve fund.
Laws specify how much must be held in the fund.
Claims are paid from the fund.
Relatively few policyholders make claims each year.
Other moneys are invested and profits are used to
run the company.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Private Insurance and Social Insurance
Private insurance—voluntary insurance paid by
individuals and companies: life insurance, health
insurance, property and liability insurance
Social insurance—government programs meant to
protect individuals from future hardships: Social
Security
Social Security includes old age, survivors, and
disability insurance, unemployment compensation
and workers’ compensation
‹#›
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 19
American Civics
Section 4: Insurance Against Hardship
Social Security and Its Future
Social Security Act of 1935—part of the New Deal;
intended to protect citizens from future hardships
Retirement population is growing while birthrate is
dropping.
Fewer workers will be supporting growing group of
retirees.
Critics argue the tax will continue to rise and prefer
to abolish the program.
‹#›
HOLT, RINEHART
AND
WINSTON