LESSON PLAN: WHY MONEY WAS INVENTED

Lesson Summary

The bell is ringing - here comes Mr. Bear’s ice cream truck! Join the Green$treet$ Kids as they try to get some ice cream from Mr. Bear. In the process they learn all about trade and money. Topics include why people trade, why trade is sometimes difficult, the history of money, characteristics of money, and different types of money. Do they end up getting the ice cream?

Concept: Trade and Money

Definition: People TRADE (exchange) with each other to get the goods and services they want.  To make trade easier, people use MONEY.

Comprehension Questions:

At the beginning of the story, why was Short Cut trading so much?
He wanted the things the other kids had (yo-yo, striped skate laces, popcorn) more than the items that he had.

Was he successful at trading? Explain why or why not.
He was successful at trading for the yo-yo and striped skate laces, but he was not successful trading for the popcorn. This was because Buck didn’t’ want his squished sandwich!

What must be true for a trade to take place?
Each person must want what the other person has and be willing to trade for it.

Why couldn’t the kids get any ice cream from Mr. Bear?
Mr. Bear didn’t want to trade – he wanted money. Small Change had some money, but it wasn’t enough.

What do we now use to help us to trade?
Money!

What is another name for “trade?”
Barter, exchange

What were some of the problems with barter?
Items spoiled and were difficult to transport.

When people traded, did they always agree on prices?
No! People haggle when they trade. They try to get the best price possible.

What things did people use as the first kinds of “money?” Why didn’t these work?
Shells, beads, feathers. Shells cracked, feathers flew away, and beads rolled away. (To be effective, money must be scarce, divisible, portable, and durable.)

What kinds of metals did people begin to use as money?
Gold, silver, bronze, copper, iron, lead, tin

What was a problem with using pieces of metal as money?
It was necessary to weigh each piece when a trade was made. (People sometimes used dishonest weights in these transactions! See Proverbs 11:1)

What did people do to avoid the problem of accurately weighing pieces of metal?
They made the pieces into coins of uniform weight and size, stamping them for certification.

Why is paper used as money?
It is easy to carry, can be divided into any denomination, and can be reproduced easily. (However, because it can be reproduced easily, inflation can be a real problem. Monetary authorities must be very responsible in determining how much money to create.)

How did the Green$treet$ Kids finally get their ice cream?
They worked to earn money to buy it! This is the main way people get money – through work.

Other Concepts: Scarcity, Good and Services, Specialization

  Trade and Money 

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