Identify who prints and who distributes dollars to banks. Explain how the interaction between the bank and the public creates additional deposits.

Purpose: Identify who prints and who distributes dollars to banks. Explain how the interaction between the bank and the public creates additional deposits.

Instructions:

This week you are going to create a short animated explainer video. Your video will track the journey of a dollar bill from printing through its distributions to banks and explain how banks and the public interact to create deposits. Pay particular attention to pages 572 – 583 of your textbook. The required videos also provide some helpful information as you complete this assignment.

You can use the platform of your choice to create this animated video. PowToon

You will be required to submit a Website URL for your video so there is no need to download your video creation.

An efficiently designed video should last 2 -3 minutes on average, and in no circumstance be longer than 5 minutes. Your video should answer the following questions:

What government organization is responsible for printing US currency.

What government organization is responsible for distributing that currency to retail banks?

What government organization is responsible for insuring the deposits in banks.

How do banks and the public interacting create additional deposits (spendable money) through the lending and deposit process?

a. Define the fractional reserve banking system.

b. Show an example that includes:

i. amount of your choosing as an initial deposit,

ii. reserves held with a 10% required reserve ratio,

iii. amount of loan with no excess reserves held, and

iv. how loan proceeds are redeposited.

Take this through two rounds to show the creation of spendable money from the process. Be sure to make clear the total created.

Requirements: full example

Money and Banking Explainer Video Pre-Work Document

The purpose of this document it to focus your attention to the required elements of the video before you start building your deliverable.

What government agency is responsible for printing money?

What government organization is responsible for distributing that currency to retail banks?

What government organization is responsible for insuring the deposits in banks. 

How do banks and the public interacting create additional deposits (spendable money) through the lending and deposit process?

Define the fractional reserve banking system.

Example: Use the following assumptions when you create your example below:

All currency is deposited in banks

Banks hold no excess reserves.

What amount are you choosing as your initial Deposit for your example? (You can’t use $1,000 or $10,000)

Round 1:

How much will be held in reserves held with a 10% required reserve ratio in Round 1?

What is the amount of loan with no excess reserves held in Round 1?

How much of the loan proceeds are redeposited to kick off Round 2?

Round 2:

How much will be held in reserves held with a 10% required reserve ratio in Round 2?

What is the amount of loan with no excess reserves held in Round 2?

How much of the loan proceeds are redeposited?

What is the simple money multiplier when there is a 10% required reserve ratio?

When the process is complete how much money does your initial deposit lead to?