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$$$MONEY$$$

$$$MONEY$$$. AMERICANS SHOULD KNOW. What happens to money that is torn or worn? What is the difference between a Federal Reserve note and a United States note? What are the functions of money?. FUNCTIONS OF $$$$. Medium of exchange (acceptable by all) Store of value (savings)

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$$$MONEY$$$

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  1. $$$MONEY$$$

  2. AMERICANS SHOULD KNOW • What happens to money that is torn or worn? • What is the difference between a Federal Reserve note and a United States note? • What are the functions of money?

  3. FUNCTIONS OF $$$$ • Medium of exchange (acceptable by all) • Store of value (savings) • Unit of account (compare prices) • Standard of deferred payment (claim on goods/services that can be exercised now or later)

  4. PAPER MONEY All paper money regardless of issue date is still legal tender

  5. Federal Reserve Notes • 99% of our money • Current Denominations: $1, $2, $5, $10, $20, $50, $100 • Before 1945: $500, $1,000, $5,000, $10,000 • July 14, 1969—Denominations of $500 and larger were retired • Treasury seal & serial numbers are green

  6. United States Notes • Make up less that 1% of currency • Since 1969, only $10 denominations have been issued. • Prior to 1969, $2 and $5 were issued. • 1966, $2 discontinued • 1968, $5 discontinued • Treasury seal and serial numbers are printed in red.

  7. UNFIT MONEY • Average life of $1 bill is 17-18 months • Larger denominations usually last longer • Old, worn, torn, or soiled money is sent to the Federal Reserve Bank to be exchanged for new

  8. FEDERAL RESERVE • Receive $ from commercial banks and others • Decides if it is fit or unfit • Fit is stored • Unfit is destroyed by machines that shred it to 1/16 of an inch • About 1/3 are unfit

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