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Introduction to Business Chapter 25 The Banking System and Financial Services

Introduction to Business Chapter 25 The Banking System and Financial Services . Essential Question: How does the banking and financial system help build and support our economy?. Standards Addressed: .

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Introduction to Business Chapter 25 The Banking System and Financial Services

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  1. Introduction to Business Chapter 25 The Banking System and Financial Services Essential Question: How does the banking and financial system help build and support our economy?

  2. Standards Addressed: • 1.2 Business Environment (C): Students will understand the development and structure of business environments. They will demonstrate competency by identifying the dynamic components of business structure and its relationship to the global business environment. • 1.2.8 Interrelationships of Business Operations – discuss the interrelationships between different business lines as they relate to finance, tax, operations, human resources, marketing, production, management, and the legal environment. 1.4 Economics and Financial Concepts (C): Students will understand the impact of global and domestic businesses, financial concepts, and integrated business models. They will demonstrate competency by using appropriate technology and other resources to solve business problems. • 1.4 Economics and Financial Concepts (C): Students will understand the impact of global and domestic businesses, financial concepts, and integrated business models. They will demonstrate competency by using appropriate technology and other resources to solve business problems. • 1.4.1 Business/Financial Relationships – analyze the financial implications of various functions of a business and describe how they interrelate • 1.4.6 Financial Statements–explain how financial statements are necessary for business planning and for the continuous monitoring of business performance • 1.4.7 Financial Systems–examine how financial systems and tools are used to solve business problems and to perform business transactions

  3. Chapter Objectives • Describe the major types of deposit and non-deposit institutions. • Detail the services provided by the financial industry • Outline the functions of the Federal Reserve System. • Explain how banks earn money, help communities and create economic growth

  4. Business of Banking p.339 • Like any business they are expected to provide a service, earn revenue and make a profit. • Unlike some businesses banks are regulated at the state and federal levels of government and to protect the public trust. • Banks make most of their revenues by charging for loans they make and by investing part of the money deposited by customers.

  5. Banks and other deposit institutions p. 340 • Commercial Banks • Federal Deposit Insurance Corporation (FDIC) • Savings and Loan Associations • Mutual Savings Banks • Credit Unions

  6. Non-deposit institutions p.342 • Insurance Companies • Investment Companies (Brokerage Firms) • Consumer Finance Companies • Mortgage Companies • Check Cashing Outlets • Pawnshops

  7. Types of financial services p.342 • Accepting Deposits (Savings, interest) • Transferring Funds (Checking, Direct Deposit, ACH/EFT, bank wire) • Lending Money (loans, credit cards, mortgages) • Storing Valuables (safe-deposit boxes) • Providing Financial Advice and Investment Services • Managing Trusts (trust companies)

  8. The Federal Reserve System p. 346 • Federal agency set up to supervise and regulates member banks and serve the public efficiently. • The country is divided into twelve (12) districts). • Holding of bank reserves., usually 15%. • Serves member banks by accepting their deposits, lending them money, and providing other services.

  9. Financial Institutions and Economic Growth p. 347 • Several million people are employed in our financial institutions. • Through your savings and investments, people and businesses can: • build homes. • start new businesses. • plant crops. • finance education • buy goods. • pave streets • build hospitals. • buy new business equipment.

  10. Assignments • Do Now (Read problem and calculate answer in an Excel spreadsheet, show your work. Give a short explanation as to your answer.) • Day 1 Calculate Business Data p.350 #31. • Day 2 Calculate Business Data p.349 #29. • Workshop Discussion (Open and save in Microsoft Word document. Write and present your group’s brief response) • Day 1 Communicate Business Concepts p. 348 questions 11-12. • Day 2 Communicate Business Concepts p. 348 questions 13-14.

  11. Homework • Day 1 Define Key Terms Develop your Business Language p. 349 • Day 2 Answer Review your reading questions 1-10 p.348

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