$$$MONEY$$$

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)• Standard of deferred payment (claim

on goods/services that can be exercised now or later)

PAPER MONEY

All paper money regardless of issue date is still legal tender

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

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.

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

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