The Mighty Dollar – How Does It Really Work?

Today's the day. You've saved up enough to buy that thing you've been wanting for sooooo long. Maybe it's a smart phone, a car, a flat screen TV, whatever it is, you're going to need to pay for it.

How will you do that? Will you take five dozen eggs that your chickens laid in the backyard to the bank? Probably not. You can barter for some things with people you know, but not at the store. Should you take that lump of gold that your grandfather gave you? Not a good idea either. While gold is a precious metal, the store doesn't have a scale to weigh it, and won't accept it as payment. How about cash, checks or debit cards? Now you're talking. Why can you use these? They all have one thing in common: they are all forms of money.

The History of Money

Paper money hasn't been around that long, and debit cards were created only about thirty years ago. Of course, money has been around for thousands of years. Let's take a brief look at the history of money and see how it's changed over time to become what it is today. And with all the changes in technology, you can only imagine how much this will change in the near future.

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The History of Banking in the United States

In this interactivity, you will explore some of the significant developments in banking and credit from the 1700s to the present. Click the player button to begin.

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Why a Federal Reserve?

The mighty U.S. dollar didn't get to be the world's most important currency on its own. Back in the 1910s, the government established the Federal Reserve Bank, or Fed, to protect bank depositors, ensure the stability of the nation's financial institutions, and conduct monetary policy for the government. Let's look at how the Fed developed, and some important roles it plays in this presentation.

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