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1 Barter and Money Overview In this lesson, students will gain an understanding of the role money plays in the US economy. The lesson begins with a simulation of a barter economy and discussion of the need for money. The students will then learn about the characteristics, functions, and types of money through discussion and reading an informative comic book about money. Grade 10 NC Essential Standards for American History: The Founding Principles, Civics & Economics • FP.E.2.1 - Explain the basic concepts of trade (e.g., including absolute and comparative advantage, exchange rates, balance of trade, gains from trade, etc.) Essential Questions • What is the definition and function of money? • Why do societies use money? • What characteristics are necessary for money do be used effectively? Materials • Barter simulation (Handout 1), attached • “The Story of Money” comic books; copies are available at http://ia600202.us.archive.org/23/items/gov.frb.ny.comic.money/gov.frb.ny.comic.money.pdf • “The Story of Money” Guided reading questions (Handout 2), attached • Picture of US currency (Visual 1), attached • Sample test questions and answer key, attached Duration 45-60 minutes Procedure Warm Up: Barter Simulation 1. As a warm up, the students will participate in a simulation of bartering goods. Teacher should: • Print 1-2 copies (depending on class size) of Handout 1: Barter Simulation. • Cut the sheets on the solid lines (not the dashed), so that each student will receive one square that includes both a good that they “want” and a good that they “have”. • You may want to print a square for yourself as well so that you can model the difference between a “want” and a “have” • Give each student a square. You may want to already have these placed on student desks turned over with instructions for students not to look at their sheet until told to do so. 2. Project and explain the following instructions to students: • Each of you has been given a sheet of paper. On this sheet of paper, you are given a particular good that you have. Example: “You have 4 bales of hay”. The sheet of paper also states a good that you want. Example: “You want 5 pigs” • The goal of the simulation is for you to trade with your classmates so that your “want” is the same thing as your “have”

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    BarterandMoneyOverviewInthislesson,studentswillgainanunderstandingoftherolemoneyplaysintheUSeconomy.Thelessonbeginswithasimulationofabartereconomyanddiscussionoftheneedformoney.Thestudentswillthenlearnaboutthecharacteristics,functions,andtypesofmoneythroughdiscussionandreadinganinformativecomicbookaboutmoney.Grade10NCEssentialStandardsforAmericanHistory:TheFoundingPrinciples,Civics&Economics FP.E.2.1-Explainthebasicconceptsoftrade(e.g.,includingabsoluteandcomparativeadvantage,

    exchangerates,balanceoftrade,gainsfromtrade,etc.)

    EssentialQuestions Whatisthedefinitionandfunctionofmoney? Whydosocietiesusemoney? Whatcharacteristicsarenecessaryformoneydobeusedeffectively?Materials Bartersimulation(Handout1),attached TheStoryofMoneycomicbooks;copiesareavailableat

    http://ia600202.us.archive.org/23/items/gov.frb.ny.comic.money/gov.frb.ny.comic.money.pdf TheStoryofMoneyGuidedreadingquestions(Handout2),attached PictureofUScurrency(Visual1),attached Sampletestquestionsandanswerkey,attached

    Duration45-60minutesProcedure

    WarmUp:BarterSimulation1. Asawarmup,thestudentswillparticipateinasimulationofbarteringgoods.Teachershould:

    Print1-2copies(dependingonclasssize)ofHandout1:BarterSimulation. Cutthesheetsonthesolidlines(notthedashed),sothateachstudentwillreceiveonesquarethat

    includesbothagoodthattheywantandagoodthattheyhave. Youmaywanttoprintasquareforyourselfaswellsothatyoucanmodelthedifferencebetweena

    wantandahave Giveeachstudentasquare.Youmaywanttoalreadyhavetheseplacedonstudentdesksturnedover

    withinstructionsforstudentsnottolookattheirsheetuntiltoldtodoso.2. Projectandexplainthefollowinginstructionstostudents:

    Eachofyouhasbeengivenasheetofpaper.Onthissheetofpaper,youaregivenaparticulargoodthatyouhave.Example:Youhave4balesofhay.Thesheetofpaperalsostatesagoodthatyouwant.Example:Youwant5pigs

    Thegoalofthesimulationisforyoutotradewithyourclassmatessothatyourwantisthesamethingasyourhave

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    Inordertotrade,youshouldtearyoursheetofpaperatthedashedline.Youmaytradeawayyourhave,butyoumustkeepyouroriginalwant

    Whenyournewhavematchesyouroriginalwant,returntoyouseat.3. Allstudentstobeginthebarter.Donottrytoworkitoutsothateverystudentwillbeabletofind

    someonetotradewith.Therealgoalofthesimulationisforsomestudentstonotbeabletomatchtheirhavewiththeirwant,butdonottellthestudentsthisbeforehand.

    4. Allowthesimulationtogoonforabout5minutes.Noteveryoneisgoingtobeabletoreachtheirgoal,somonitorandendthesimulationwhenyouthinkasmanypeoplehavefoundamatchasaregoingto.Afterstudentshavereturnedtotheirseat,askstudentsthefollowingquestionsanddiscuss: Raiseyourhandifyouwereabletomatchyourwantandyourhaveafteronetrade?Twotrades? Raiseyourhandifyouwerenotabletomatchyourwantandyourhavefromtrading? Whyweresomeofyouallabletogetsomeonetotradewiththemandotherswerenot? Wasthereanyonewithagoodthatnoonewanted?

    5. Transitionintodiscussingwhysocietyhasreplacedtheprocessofbarterwiththeuseofmoney.Define

    barterforthestudentsandprojectthefollowingdefinitionontotheboard: Barterisatypeoftradeinwhichgoodsorservicesaredirectlyexchangedforothergoodsand/or

    services,withouttheuseofmoney.6. DrawaT-chartontheboard,labelingonecolumnwitha+signandtheotherwitha-sign.As

    studentsdiscussthefollowingquestions,recordtheirresponsestothefirsttwoonthechart: Basedonthesimulation,whatarethebenefitsofbarter? Basedonthesimulation,whatarethedrawbackstousingbarter? Howdowegetthethingswewantnow? Whydoyouthinkmoneyhasreplacedbarter? Inwhatwaysisusingmoneymoreefficientthanbarter? Whatarethedrawbackstousingmoney?

    Note:Ifyouhavetime,studentsmaybenefitfromfillinginagraphicorganizertocompareabarter

    economyandamoneyeconomy.Seetheexampleat:http://www.readwritethink.org/lesson_images/lesson275/compcon_chart.pdf

    7. Next,projectthedefinitionofthewordmoneyontheboard:

    Moneyisanythingthatisgenerallyacceptedaspaymentforgoodsandservicesandrepaymentofdebts.

    8. Ontheboard,projectimagesofUnitedStatescurrencysuchasVisual1(attached).Askthestudentstobrainstormwords/characteristicsthatcometomindastheyobservetheimage.Recordtheirresponsesontheboard.Asstudentsbrainstorm,encouragethemfocusonthevariouscharacteristicsthatallmoneyhasincommon,ratherthanjusttheUSdollar.Extendtheactivitybygivingeachstudenta2-3stickersandinstructingthemtovoteonthecharacteristicsofmoneythattheythinkaremostnecessary.Leadthestudentstothefollowingcharacteristicsthatmoneyneedstobeeffective:

    Durability Portability Acceptability Divisibility Stabilityinvalue

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    9. PassoutcopiesofTheStoryofMoneycomicbookandtheattachedguidedreadingquestions(Handout2).Havestudentsreadthecomicbookandcompletethequestions.(Comicbooksareavailableonlineathttp://ia600202.us.archive.org/23/items/gov.frb.ny.comic.money/gov.frb.ny.comic.money.pdf.Amaximumof30copiesarefreeperteacherandtakeapproximatelytwo-threeweekstoarrive.Teacherwillreviewanswerstoquestionswiththestudents.)

    10. Oncestudentshavecompletedthereadingandquestions,discusstheanswersasaclass.Teachersshouldeventuallyfocusthediscussiononthethreefunctionsofmoney.Allaredefinedwithinthecomicbookandintheguidedreadingquestions,butcanbeelaboratedupon.Theyare:

    Mediumofexchange Standard/Measureofvalue Storeofvalue

    11. Informthestudentsthestudentsthattherearemultipletypesofmoney.Thecomicbookpreviewssome

    ofthesetypes.Definethefollowingtypesofmoneyandprojectontotheboard: Note:TeachersshouldalsoemphasizethattheUScurrencyisbothfiatmoneyandlegaltender.Many

    studentshavethecommonmisconceptionthatmoneyisstillbackedbygold,andisthusrepresentativemoney.

    CulminatingActivity Assignthestudentstogroupsof3-4.Informthemthattheirhighschoolhasdecidedtoissueitsown

    moneyandthestudentshavebeenaskedtodesignthecurrencyandcreateatableofthevalueofthecurrencyinrelationtocertaincommonlyusedschoolsupplies.

    Themoneyshould:o Becolorfulwithmultipleillustrationsthatrelatetohighschoollifeandtheirschoolinparticularo Meetthemajorcharacteristicsofeffectivemoneydiscussedduringclasso Haveatleastthreedifferencedenominations(divisibleunits)

    LessonExtension Havethestudentsvisithttp://www.clevelandfed.org/learning_center/online_activities/barter_island/and

    playtheEscapefromtheBarterIslandsinteractivesimulationofbartering.Thestudentswillbeaskedtobartermultipletimesontwoisland,andonthefinalislandwillbeabletousecoconuts.Thesimulationlastatmostfiveminutesandthereforeisprobablynotworthhavingtostudentsmovetoaplaceintheschool

    1.Commoditymoney-moneywhosevaluecomesfromanaturalresourceorgoodoutofwhichitismade.Examplesofcommoditiesthathavebeenusedasmediumsofexchangeincludegold,silver,copper,salt,peppercorns,largestones,decoratedbelts,shells,alcohol,cigarettes,cannabis,andcandy.2.Representativemoney-moneythatconsistsoftokencoins,otherphysicalsymbolssuchascertificatesthatcanbereliablyexchangedforafixedquantityofacommoditysuchasgold,water,oil,food,etc.3.Currency-coinsandpapermoney4.Fiatmoney-moneyusedasthecirculatingmediumofexchangethatisnotbackedbyordirectlyconvertibleintoanyspecificphysicalcommodity,butratherhasvaluebecausethesocietythatcreatedthesystemthathasassigneditvalue5.Legaltender-moneythatbylawcannotberefusedasamediumofexchange

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    withcomputers.Considerhavingthestudentscompletethesimulationoutsideofclassandcompleteashortreflectionofthesimulation,howithighlightedthebenefitofusingmoney,andhowitcomparedtothesimulationcompletedinclass.

    Havestudentsvisithttp://www.frbatlanta.org/about/tours/virtual/money/andlearnaboutthehistoryofmoneyintheUnitedStates.ThetourtakesstudentsfrompopularbartergoodsthroughthemajorerasofUShistoryuptotheFEDscurrentroleinpricestability.

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    Handout2:TheStoryofMoney1. Whatisbarter?

    2. Whatisacoincidenceofwants?

    3. Whyisbartertimeconsuming?

    4. Howdoesdivisionoflaborimprovestandardofliving?

    5. Describeusingmoneyasamediumofexchange.

    6. Doesmoneyhavetohaveintrinsicvalueinordertobeacceptable?

    7. Whydoesmoneyneedtobedivisible?

    8. Whatdoesfungiblemean?

    9. Describeusingmoneyasastandardofvalue.

    10. Whymustmoneyberelativelystableinvalue?

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    Visual1

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    PracticeTestQuestions1.Whenaconsumerwantstocomparethepriceofoneproductwithanother,moneyisbeingusedprimarilyforwhichfunction?A)storeofvalue. B)unitofaccount.C)checkabledeposit.D)mediumofexchange. 2.Whichofthefollowingisthemostimportantadvantageofthemediumofexchangefunctionofmoney?A)moneytransferspurchasingpowerfromthepresenttothefuture.B)moneymeasurestherelativeworthofproducts.C)moneyreducesthecomplicationsofbarter. D)moneyallowspeopleusecreditcardsinsteadofcurrencyUsethefollowingtoanswerquestion3:

    Items1.Agriculturalproducts2.Savingsdeposits3.Gold4.Currency5.CreditCards6.Checkabledeposits

    3.Refertotheabovelist.WhichofthechoicesfrombelowfromthelistwouldbeconsideredmoneyintheUSeconomy?

    A)1,3,4B)2,5,6C)2,4,6D)Only44.WheredoesthevalueforUnitedStatescurrencycomefrom?A)ItislegaltenderandisbackedbythegoldandsilveroftheFederalgovernment.B)Itisgenerallyacceptableinexchangeforgoodsorservicesandisbackedbythegoldandsilverof

    theFederalgovernmentC)Itislegaltenderandisgenerallyacceptableinexchangeforgoodsandservices.D)Itislegaltenderandmaintainstheexactsamevalueovertime.5.WhatisnotareasonforthereplacementofbarterintheUnitedStateseconomywiththeuseofmoney?A)moneyiseasilydivisibleB)moneycanneverbedestroyedC)moneyeliminatestheneedforacoincidenceofwantsD)moneyallowsforgreatereconomicspecialization

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    PracticeMultipleChoiceQuestions-ANSWERKEY1. B)unitofaccount.2. C)moneyreducesthecomplicationsofbarter.3. C)2,4,64. C)Itislegaltenderandisgenerallyacceptableinexchangeforgoodsandservices.5. B)moneycanneverbedestroyed

  • You want 5 Pigs

    You have 4 bails of hay

    You want 2 cows

    You have 5 pigs

    You want 40 boards of wood

    You have 2 cows

    You want 4 candles

    You have 40 boards of wood

    You want 5 Pigs

    You have 4 bails of hay

    You want 2 cows

    You have 5 pigs

    You want 40 boards of wood

    You have 2 cows

    You want 4 candles

    You have 40 boards of wood

    9

  • You want 4 bails of hay

    You have 4 candles

    You want 2 chickens

    You have 15 ears of corn

    You want 15 ears of corn

    You have 6 bundles of rope

    You want 6 bundles of rope

    You have 8 bags of cotton

    You want 4 bails of hay

    You have 4 candles

    You want 2 chickens

    You have 15 ears of corn

    You want 15 ears of corn

    You have 6 bundles of rope

    You want 6 bundles of rope

    You have 8 bags of cotton

    10

    Money10Handouts


The Origins of Money From Barter to Coinage. The Origins of Money Money is: Whatever people use as a medium of exchange for goods or services. A means

The History Of Money: From Barter To Banknotes

1.Barter 2.What is money? 3.The functions of money 4.Commodity, representative, and fiat money 5.Financial intermediaries 6.The Federal Reserve System

MONEY BARTER ECONOMY MONEYLESS, TRADE-BASED ECONOMY

Mr. Nunn The Origins of Money. Barter Economy An economy in which trades are made in goods and services instead of in money

Economics Chapter 11 – Money and Banking. Evolution of Money Barter economy- relies on trade of goods for goods; no money. Bartering was used before the

1 2 Barter Commodity money 3 Money accepted by law THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE

BARTER - recording the flow of money

Money and Banking Evolution of Money. Functions of Money Barter Economy –Moneyless economy that relies on trade –Hindered b/c some products offered may

Economics IS Life! Barter………..Spending Money World Exploration

Nature and functions of money. Terms to know: Inconveniences of Barter system Definition of money Meaning of Barter system Functions of money Kinds of

Acquiring Goods and Services Using Barter and Money

MONEY AND BANKING - MAGEREZA ACADEMYmagerezaacademy.sc.ke/.../MONEY-AND-BANKING-notes.pdf · MONEY AND BANKING Barter trade This is a form of trade where goods and services are exchanged

Before money was introduced, people had a system of barter or exchanging one product for another. The problems with barter led to the introduction

Barter and Money - Database of K-12 Resources

The Transition From Barter to Fiat Money Transition From Barter to Fiat Money. ... paper provides an equilibrium account ofthe transition between barter and fiat ... if the currency

The Evolution of Money 1. Some examples of money before there was money? Problems with barter The birth of money S1S1

Content 1.Barter System 2. Functions of Money 3. Properties of Money 4. Types of Money

BARTER SYSTEM: MONEY - gimmenotes

MONEY Macroeconomic Unit. History of Modern Money Before money was developed people would barter (trade) for goods Trade Problems Double coincidence of

My Pay, My Money. What is money? Before money there was barter (trading) Governments print money to make buying easier Gold coins are worth something

Money and the Financial System. The Evolution of Money Barter is a system where people exchange products directly Barter depends on a double coincidence

Money vs. Barter Money - Any good that is widely accepted for purposes of exchange and in the repayment of debt. Barter - Exchanging goods and services

1 of 33 THE NEW AGE OF BARTER Why Barter? Who Barters? International Barter and Counter Trade Government Views Technology Behind Modern Barter Barter

You own a blue ray player, but want an ipod Barter vs. Money

Demand of Money. EVOLUTION OF MONEY Money was developed according to needs & Requirements. Main aim was to remove the shortcomings of the Barter System

civics.sites.unc.edu · Title: Microsoft Word - CubanMissileCrisis.doc

Acquiring Goods and Services Using Barter and Money SOL 2.8 Review

Unit 9 - Functions of Money n The Functions of Money A society without any form of money is called a barter economy. Goods and services are traded directly

The Evolution of Money. Barter Economy “”Mutual Coincidence of Wants

Personal Finance Unit 1: MONEY. What’s the BIG DEAL about MONEY? It allows us to move beyond the barter (good for good) system Characteristics of Money:

C hapter 25 Money © 2002 South-Western. 2 Economic Principles Barter Exchange The Characteristics of Money Gold-Backed and Fiat Money Liquidity

System Requirement Specification for A Mobile Barter … · System Requirement Specification for A Mobile Barter Shop ... People or companies without cash money often have trouble

The Impact of Money-Free Computer Assisted Barter Systems

Bitcoin ฿. History of Money Barter Goods *BECOME* Money Acceptable Durable Portable Scarce Divisible Recognizable