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Summary: Concept: Money Definition: Money is anything widely accepted as final payment for goods and services. Comprehension Questions: What are some goods that you often buy or would like to buy? (Answers will vary) How can you pay for the goods that you buy? (You can pay by cash, check, or credit card.) A long time ago there was no money. How did the people pay for goods? (They would barter with each other, trading potatoes for cloth, fish for meat, firewood for animal skins, etc.) When people trade with each other, who gains from the trade? (Both parties gain from voluntary trade. Voluntary trade is not a "win-lose" event.) Why is barter often difficult? (You have to find someone who wants what you have and vice versa. Also, it is sometimes difficult trading items of greatly differing values - like the cow for a coat in the story.) What is money?
(Money is anything commonly traded for goods or services.) What is the primary function of money? (It helps people to trade.) Besides shells, what were earlier forms of money? (The native Americans used beads made into wampum belts; the Africans used lumps of salt; the Mexicans used beans; the people on the island of Yap used huge stone rings; the people on the Santa Cruz islands used red feathers; and many people began to use metal as money.) Why were gold and silver commonly used as money? (These metals were very scarce; did not wear out - durable; could be made in any size - divisible.) Why did people
often prefer to use paper notes instead of gold and silver coins?
Name the currency used by five different countries (Answers will vary. The currencies could be the pound from England, the franc from France, the lira from Italy, the peseta from Spain, the yen from Japan, etc.) How are the dollar bills and the coins produced? (The dollar bills are printed on special paper with ink and secret chemicals; engraved with hundreds of thin lines; marked with tiny red and blue threads in the paper, etc. Coins are cut from strips of metal, then punched with a design.) What are different ways to receive money? (Produce a good or service, work and earn wages, sell things, receive money as gifts, get an allowance, etc.) What could you do with your money? (Answers will vary. You could buy something, give some of it to church or charity, save it, etc.) What is the purpose of a bank? (Banks help transfer money from savers to investors/borrowers. Banks pay interest to savers, but charge a higher rate of interest to borrowers.) Other Concepts: Barter, Goods and Services, Trade
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