Money, Money, Money.MONEY!Chapter 11 not bankruptcy, in your book goofball!

VocabularyBarter economyMutual Coincidence of WantsMoneyMedium of ExchangeMeasure of ValueStore of ValueCommodity MoneyFiat MoneySpecieMonetary Unit*

In the beginning90 of theseWere traded for a hundred pound barrel of this. Virginia 1620*

BarterRelies on trade.Theres a problem though.Lets show it by playing a game.*

The Groups1. Blacksmith 2. Cattle Rancher 3. Corn Farmer 4. Lumberjack 5. Shoemaker*

Trade RulesAxes can be traded for Hides or Corn.Hides can be traded for Axes or WoodCorn can be traded for Axes or ShoesWood can be traded for Hides or ShoesShoes can be traded for Corn or Wood*

Ok, DebriefWere you successful?What was the major problem?What would happen if we added in different values for each trade item?*

3 Functions of Money1. Medium of exchange Must be accepted by all parties as payment for goods & services.*

3 Functions of Money2. Measure of ValueAccepted as the common denominator used to express worth.Allows us to make comparisons with other products.*

3 Functions of Money3. Store of ValueAllows us to save the purchasing power until needed.*

Types of MoneyCommodity money has another use besides money.Agreed upon by the people exchanging.*

Tea Brick - ChinaCompressed Cheese - RussiaBarley - USATobacco - USA

Fiat MoneyIssued by government decree (fiat.)*

Paper CurrencyOriginally US state laws allowed individuals & banks to issue their own paper money provided it was backed up by gold & silver.Continental dollars however werent backed up by anything and were eventually worthless. Billion printed by 1783*

SpecieCoins made from gold or silver.*

The Almighty Thaler2 bits,4 bits6 bits,A peso!All for the ThalerStand up and say so!*

Gotcha!Colonial Americans preferred specie to paper money because it was always useful and accepted in trade.Most specie in colonies were from Spanish Peso.The old Spanish Doubloons, or pieces of 8 were the same size as Austrians Thalers.*

No pieces of 8 for the USABen Franklin and Alexander Hamilton set the US Currency up on 10ths.Eagles $10Half Eagles $5Quarter Eagles $2.50Dollars or Units $1Half Dollars $0.50Quarter Dollars $0.25Dismes $0.10Half Dismes $0.05Cents $0.01Half Cents $0.005*

Characteristics of MoneyPortabilityDurabilityDivisibilityLimited Availability*

Quiz Time!