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Money and Trade

Money and Trade. Functions of Money. Has three functions: Medium of exchange . Store of value. Measure of value . . Types of Money. Anything people are willing to exchange for goods can be considered money. Most common types of money today: Coins = metallic forms of money .

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Money and Trade

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  1. Money and Trade

  2. Functions of Money • Has three functions: • Medium of exchange. • Store of value. • Measure of value.

  3. Types of Money • Anything people are willing to exchange for goods can be considered money. • Most common types of money today: • Coins = metallic forms of money. • Currency = coins and paper money. • Checking Accounts • Savings Accounts

  4. Financial Institutions • Commercial Banks • Savings and Loan Associations (S&Ls) • Credit Unions

  5. Protecting the Financial System • Federal Deposits Insurance Corporation (FDIC) • Insures individual accounts in financial institutions for up to $100,000!!

  6. Why does Money have value? Because WE say so!

  7. Trade • Money facilitates trade because its value can transfer between countries. • Why do we trade? Because trade creates VALUE!

  8. Trade Creates Value Activity

  9. Trade Creates Value Activity • There will be 5 groups. • Group 1  • Group 2  • Group 3  • Group 4  • Group 5 

  10. Round One • Without looking - pick a piece of candy out of the bag (DO NOT EAT IT YET!) • Rate your happiness with the candy from 1-10 – record this number • 1 being least happy • 10 being most happy • On your guided notes, write the sum of your group’s ratings under round one.

  11. Round Two • Trade candies within your group – everyone must trade! • Rate your happiness with the candy from 1-10 – record this rating • 1 being least happy • 10 being most happy • On your guided notes, write the sum of your group’s ratings under round two.

  12. Round Three • Now everyone must trade outside of your borders / group – So now, Trade candies with someone in a different group. • Once you trade - GO BACK TO YOUR GROUP! • Rate your happiness with the candy from 1-10 – record this number • 1 being least happy • 10 being most happy • On your guided notes, write the sum of your group’s ratings under round two.

  13. GO BACK TO YOUR SEATS! • Share your sums with the rest of your class.

  14. What was happening?**You can eat your candy while we discuss • What did the trade within your group represent? • National Trade • What did the trade between the groups represent? • International Trade • Did trading increase your happiness with the candy you received? Why or why not? • Did you end up happier or less happy than you started? Why?

  15. CW/HLA • Read Chapter 21.3 • Reminders: • Study for Economics Test on Thursday! • Econ Notes due Thursday!

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