What and Where in the World is Money? is a self-guided interactive that takes students on a time machine to six different periods and places in history, exploring the ways that the form of money has changed over the millennia, from things of practical value (like food) to precious metals (like gold) to symbols of value (like dollar bills). To get home, students must make an exchange in each location, using something they have carried with them. What will have value: a bag of M&Ms? Paper money? Coins? A gold watch? Song lyrics? By the end of the interactive, students have learned that anything can be used for money, as long as the partners in the exchange agree.

11-12 year olds (5-6 graders, US) studying World Geography and Social Studies in school.

Standard 5 — Gain from Trade
Voluntary exchange occurs only when all participating parties expect to gain. This is true for trade among individuals or organizations within a nation, and among individuals or organizations in different nations.

Standard 7 — Markets - Price and Quantity Determination
Markets exist when buyers and sellers interact. This interaction determines market prices and thereby allocates scarce goods and services.

Standard 10 — Role of Economic Institutions
Institutions evolve in market economies to help individuals and groups accomplish their goals. Banks, labor unions, corporations, legal systems, and not-for-profit organizations are examples of important institutions. A different kind of institution, clearly defined and well-enforced property rights, is essential to a market economy.

Standard 11 — Role of Money
Money makes it easier to trade, borrow, save, invest and compare the value of goods and services.

• Engage students' interest by asking, "Who likes money?" Ask, "Why do you like money?" and allow time for students to respond. Then ask, "What is money?" and record responses on the board. Students may say that money is currency, coins, or "what you use to buy things." All of these answers are correct. Then hold up a piece of wrapped candy, a metal nail, and a small stone, and ask, "Could these be used as money?" Allow students time to discuss and debate before leading them to understand that anything can be used as money as long as both the buyer and seller agree. Explain that the candy, nail and stone are "commodity money," because they have uses other than as a medium of exchange. (The candy can be eaten, the nail can be used to build a chair, and the stone can be used as a landscape decoration.)
  
  
• Explain that the currency most countries use is an example of "fiat money." It has no other valuable use except as money. Display some coupons from different stores that you have cut out of a local newspaper. Ask students what would happen if they tried to use a coupon from Store A at Store B? Could a "buy one; get one free" coupon for Pepsi be used to buy two cases of Coke? Can a Disneyworld pass be used to gain entrance to Sea World? Why not? (Answer: Coupons and passes are like fiat money in that they have no intrinsic value but are worth what people agree they are worth.)
  
  
• Set up a money system in class in which stick-on circles will be the accepted medium of exchange. Students can be paid a certain number of circles for things such as good grades, good behavior, acts of kindness toward others, on-time assignments, good attendance, etc. (They can "save" their circles by sticking them on "bank books" made of construction paper.) The circles can then be used to "buy" classroom rewards — things such as computer time, homework passes, recess minutes, etc. From this simulation, students should recognize that money is whatever society says it is.
  
  
• Hold up a $1 bill and a $10 bill. Draw a T-Chart on the board and have students suggest similarities and differences between the two bills. Lead students to understand that the two bills are identical in construction. The ink, color and general design are the same on both. The two bills are more alike than they are different, yet one has 10 times the value of the other. Why? The only reason is that we all agree that it does.
  
  
• Ask what would happen if a student designed and printed her own currency and tried to use it at a local store. Of course, it would be rejected by the store owner. Something can only be used as money if both buyer and seller agree about its value. The U.S. government oversees the acceptability of money in exchanges in our economy. In the world economy, the IMF helps promote stable exchange of currencies among many countries.

• Divide the class into six groups. Have each group conduct research to find out about how exchanges were conducted in the following (these are the times and places highlighted in the online interactive):
  • Rome, 200 B.C.
  • China, 1020
  • Aztec Civilization, 1500
  • London, 1663
  • Canada Potlatch, 1790
  • New York, 1997
  
  
• Have students create a skit that demonstrates exchange in their group's historical period.
  
  
• After students have had an opportunity to share ideas about the history of money, have them use the IMF online activity "Where in the World and What in the World is Money?" Discuss the different things that were used as money in the activity. Were they examples of commodity money or fiat money?
  
  
• Brainstorm ideas for how money will change in the next 50, 100, 500 years. Compile students' research and ideas on a "History of Money/Future of Money" bulletin board.

Detailed Description of Student Interactive, with Answer Key
The interactive begins with you (the student) at a carnival in need of money for a purchase. An old man is standing next to a strange-looking ride attracts your attention with his calls, "Get rich instantly!" he shouts. "Travel back in time and put your money in the bank! Come back to the present and rake in the interest your money has earned since then!" On the machine there's a coin slot and a little sign that reads, "Time Travel 50¢." The old man winks, "Hop in, kid! You'll laugh all the way to the bank!"

You put your money in and set off on your first trip. But the old machine malfunctions. Instead of going back to your own town 100 years ago, you find yourself in a market in a distant time and place. You get out of the machine and see that the coin slot has changed. The time machine only takes local money! You must find a way to get enough local money to make the time machine take you home. You have a pocketful of things and must pick one to use as money in this time and place in history. Upon choosing the correct item, the time machine takes you to another time and place in history, where you must again pick an item that functions as money there. In all, you visit five places before returning home.

At the conclusion, the time machine returns you to the carnival—and all the money you put in at different times gushes out of the machine in modern money at today's value. You're rich!

Final message
Even though people today don't usually use chocolate or jewelry as money, each country still has its own kind of money, or currency. If you go to another country, you have to convert your own currency into local currency before you can buy anything. The International Monetary Fund (IMF) helps make currency exchange between countries convenient and predictable. Member countries of the IMF agree to allow their currency to be exchanged with other countries. The IMF lends money to countries in financial trouble and advises them about their economic and monetary policies to help keep the value of world currencies stable. This not only helps tourists, but it makes international trade and investment around the world possible.

Web Site
Comics. You can order classroom sets of comic books from the Federal Reserve Bank of New York. "Once Upon a Dime" provides a history of money and exchange from barter to currency to checks. http://www.ny.frb.org/publications/result.cfm?comics=1

Online Extension Activities:
Choose eight students who have finished their assigned work and have them, in pairs, evaluate the following lessons and present them to the class.

The Penny Problem. A lesson about the penny and its value as a U.S. coin. http://www.econedlink.org/lessons/index.cfm?lesson=EM257

Lewis and Clark Barter with the Native Americans. A lesson about barter during the time of Lewis and Clark. http://www.econedlink.org/lessons/index.cfm?lesson=EM270

The Need for Money that Everyone can Use. A lesson that asks students to design currency for the visually impaired. http://www.econedlink.org/lessons/index.cfm?lesson=EM302

Where and What in the World is Money?

EconEd Online