Economics 32904

1
Economics 3/29/04

• OBJECTIVE Begin analysis of macroeconomic
  concepts.
  
• I. Administrative Stuff
• 4th Quarter begins today ?
• Parent teacher conf. Tuesday 4/6/04 6-9PM
• web-site www.msu.edu/milewsk6
• Grades
• II. Journal 34
• -Kyrgyzstan
• III. Homework due Friday 4/2/04

2
Homework due Friday 4/2/04

• 1.) Read Ch11 sec1 p.284-290
• Answer questions (1,3-6) p.290
• 2.) Read Ch11 sec2 p.292-298
• Answer questions (1,3-6) p.298

3
Journal 34

• Describe how a marriage in Kyrgyzstan differs
  from a marriage in the U.S.
  
• Fun fact In French marriage is spelled with one
  r. The way to remember the difference is
  France is a Catholic nation and divorce is
  prohibited in the Catholic Church. In England, a
  Protestant nation, divorce is permitted, so the
  rr is because Protestants can remarry. ?

4
Economics 3/30/04

• OBJECTIVE Examine where money comes from.
• I. Journal 35 pt. A
• -Read Profiles in Economics p.291
• -Answer question 1 p.291
• II. Journal 35 pt. B
• -notes on money
• III. Journal 35 pt. C
• -notes on the Fed. (video)

5
In the beginning

• People traded stuff for other stuff. It was
  good, but it was inconvenient to carry around a
  bunch of heavy stuff hoping that the person you
  wanted to trade with would trade with you.
• This was the barter economy.

6
A new medium of exchange

• Something accepted by all parties as payment for
  goods and services
  
• It included Gold, Silver, and even Salt (these
  are commodities)
  
• For something to serve as money it MUST have value

7
Now we use

• Fiat money money by government decree. It is
  money because the government says it is.
  
• The greatest web-site ever
• www.msu.edu/milewsk6

8
Economics 3/31/04

• OBJECTIVE Continue analysis of how banks work
• I. Administrative Stuff
• -return of Ch6-7 Tests
• -3rd Quarter Grades
• II. Journal 36 pt. A
• -notes on Bank investigations (in the film)
• III. Journal 36 pt. B
• -notes on money

9
Brief History of Fiat Money

• In the U.S. from Revolutionary times until the
  Civil War paper currency (Fiat) was issued by
  private banks.
  
• At first banks were honest and only printed
  enough notes they could reasonably back with gold
  and silver.
  
• Then, problems arose.

10

• The Bank of Milewski
• Printed in Wyandotte, MI
• 5.00
• In Narcoleptics We Trust

11
Problems

• 1.) Too many currencies in circulation
• 2.) Banks could print more money when ever they
  wanted. Temptation was there.
  
• 3.) Counterfeiting

12
By the time of the Civil War

• Congress needed money to fight the war, so the
  idea of greenbacks emerged.
  
• At first they had no backing of gold or silver,
  but they were declared legal tender.
  
• In 1862, the Legal Tender Act was passed and 150
  million dollars was printed.

13
National Banks

• Private banks that got their charter to operate
  from the Federal Government, not the state
  governments.
  
• They issued a standard national currency backed
  by war bonds.
  
• In 1865 Congress forced the state banks to join
  the federal system by placing a 10 tax on all
  privately printed bank notes

14
Gold and Silver Certificates

• Gold certificates backed by gold in the U.S.
  Treasury were originally designed to settle
  accounts between banks and were printed in large
  denominations.
• Silver certificates -

15
Economics 4/1/04

• OBJECTIVE Examine how the federal government
  produces fiat money today.
  
• I. Administrative Stuff
• -parent teacher conf. Tuesday 4/6/04
• -1/2 day Thursday 4/8/04
• -No School 4/9/04
• II. Classwork
• -Modern Marvels The U.S. Mint (video)

16
Economics 4/2/04

• OBJECTIVE Examine current events in Economics.
• I. Administrative Stuff
• -set your clocks ahead 1 hour Sunday!!
• II. Journal 37
• -Summarize 3 of the following article from
  todays Detroit Free Press
  
• Detroit Schools to eliminate 3,200 jobs
• Cold steel, hard times for industrial
  suppliers
  
• Kmart dispute shows tax code is a quagmire
• Work will pave way for the Super Bowl