barter and money - database of k-12 resources

1

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• “TheStoryofMoney”comicbooks;copiesareavailableat

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

Duration45-60minutesProcedure

WarmUp:BarterSimulation1. Asawarmup,thestudentswillparticipateinasimulationofbarteringgoods.Teachershould:

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

includesbothagoodthatthey“want”andagoodthatthey“have”.• Youmaywanttoprintasquareforyourselfaswellsothatyoucanmodelthedifferencebetweena

“want”anda“have”• Giveeachstudentasquare.Youmaywanttoalreadyhavetheseplacedonstudentdesksturnedover

withinstructionsforstudentsnottolookattheirsheetuntiltoldtodoso.2. Projectandexplainthefollowinginstructionstostudents:

• Eachofyouhasbeengivenasheetofpaper.Onthissheetofpaper,youaregivenaparticulargoodthatyouhave.Example:“Youhave4balesofhay”.Thesheetofpaperalsostatesagoodthatyouwant.Example:“Youwant5pigs”

• Thegoalofthesimulationisforyoutotradewithyourclassmatessothatyour“want”isthesamethingasyour“have”

2

• Inordertotrade,youshouldtearyoursheetofpaperatthedashedline.Youmaytradeawayyour“have”,butyoumustkeepyouroriginal“want”

• Whenyournew“have”matchesyouroriginal“want”,returntoyouseat.3. Allstudentstobeginthebarter.Donottrytoworkitoutsothateverystudentwillbeabletofind

someonetotradewith.Therealgoalofthesimulationisforsomestudentstonotbeabletomatchtheir“have”withtheir“want”,butdonottellthestudentsthisbeforehand.

4. Allowthesimulationtogoonforabout5minutes.Noteveryoneisgoingtobeabletoreachtheirgoal,somonitorandendthesimulationwhenyouthinkasmanypeoplehavefoundamatchasaregoingto.Afterstudentshavereturnedtotheirseat,askstudentsthefollowingquestionsanddiscuss:• Raiseyourhandifyouwereabletomatchyour“want”andyour“have”afteronetrade?Twotrades?• Raiseyourhandifyouwerenotabletomatchyour“want”andyour“have”fromtrading?• Whyweresomeofyouallabletogetsomeonetotradewiththemandotherswerenot?• Wasthereanyonewithagoodthatnoonewanted?

5. Transitionintodiscussingwhysocietyhasreplacedtheprocessofbarterwiththeuseofmoney.Define

barterforthestudentsandprojectthefollowingdefinitionontotheboard:• Barterisatypeoftradeinwhichgoodsorservicesaredirectlyexchangedforothergoodsand/or

services,withouttheuseofmoney.6. Drawa“T-chart”ontheboard,labelingonecolumnwitha“+”signandtheotherwitha“-“sign.As

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

Ø 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

3

9. Passoutcopiesof“TheStoryofMoney”comicbookandtheattachedguidedreadingquestions(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:Ø 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

playthe“EscapefromtheBarterIslands”interactivesimulationofbartering.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

4

withcomputers.Considerhavingthestudentscompletethesimulationoutsideofclassandcompleteashortreflectionofthesimulation,howithighlightedthebenefitofusingmoney,andhowitcomparedtothesimulationcompletedinclass.

• Havestudentsvisithttp://www.frbatlanta.org/about/tours/virtual/money/andlearnaboutthehistoryofmoneyintheUnitedStates.ThetourtakesstudentsfrompopularbartergoodsthroughthemajorerasofUShistoryuptotheFED’scurrentroleinpricestability.

5

Handout2:“TheStoryofMoney”1. Whatisbarter?

2. Whatisa“coincidenceofwants”?

3. Whyisbartertimeconsuming?

4. Howdoesdivisionoflaborimprovestandardofliving?

5. Describeusingmoneyasamediumofexchange.

6. Doesmoneyhavetohaveintrinsicvalueinordertobeacceptable?

7. Whydoesmoneyneedtobedivisible?

8. Whatdoesfungiblemean?

9. Describeusingmoneyasastandardofvalue.

10. Whymustmoneyberelativelystableinvalue?

6

Visual1

7

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.WhatisnotareasonforthereplacementofbarterintheUnitedStates’economywiththeuseofmoney?A)moneyiseasilydivisibleB)moneycanneverbedestroyedC)moneyeliminatestheneedforacoincidenceofwantsD)moneyallowsforgreatereconomicspecialization

8

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