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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)Unit of account (compare prices)St

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MONEY

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    1. $$$MONEY$$$ PLVS FALL 2007

    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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