Discussion: Money and Banking

 

Answer ONE of the following questions (around 200 words ).  In this forum, you will not see your peers' posts after you post.

Option 1: How do banks create money in the United States? Carefully explain how the fractional reserve system works.  Do a little research and determine the current reserve requirements.  Are you surprised about the percentage of money that banks hold as reserves? Do you expect the reserve requirement to be higher or lower?  Share your thoughts.

OR

Option 2: Consider the following items:

• Gold Coins
• Grocery Store Coupons
• Funds in a checking account
• Funds in a savings account
• 100 shares of Google stock
• Food Stamps

Which of these items is the best example of money? Which is the worst? How would you order the list from most money-like to least money-like? Explain your reasoning.