barter and money - database of k-12 resources | the...

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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

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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

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Money10Handouts