• describe the economic meaning of money
• explain money’s role in voluntary exchange

• Visual learners: incorporates visual aids and real-life objects, which offer connections to the real world
• Auditory learners: conductsclass discussions involves students in listening and communicating
• Kinesthetic learners: engages students in a voluntary exchanges of goods and in a mock auction

• Hold up a one-dollar bill in front of the class. Ask students if the dollar bill is money. Students will probably say “yes.”
• Show students a credit card.  Ask students if the credit card is money.  If students say it is money, then ask them to explain their logic.
• Then ask: What is the difference between these two forms of money? Differences include:
  • the government issued the dollar
  • a bank or credit agency issued the card
  • a dollar is acceptable as payment by nearly everyone
  • credit cards may not always be accepted in an exchange for goods or services
  • the dollar bill represents money you own today
  • credit enables you to use another agency’s money and pay them later

Direct instruction

• Show students a seashell and explain that shells were sometimes used as money.
• Write the term medium of exchange on the white board, explaining that money replaces other goods in order to make exchanges easier.
• Add the terms barter and commodity to the white board.  Explain that Barter is a means of trading.  Bartering involves goods called commodities that often have unequal value.
• Ask your students, “How many chickens is a bicycle worth?” The students will find it difficult to find determine how many chickens a bike is worth.  They will probably find it more difficult to make the exchange.  Now ask your students to imagine that they have no reliable food source at hand. How much would the chickens be worth in that instance?
• Explain that money is a unit of accounting or measure. Prices, in money terms, enable people to compare values of goods and services. 

• Have each student announce what items they have on their cards.
• Ask if anyone would like to trade an item with another student (without using their money). Ask them to make the exchange. Note how many exchanges take place.
• Ask whether any student wants to exchange the sum of money listed on their card for an item on a classmate’s card. Ask them to make the exchange.
• Hold an auction in which that item is sold to the highest bidder. Discuss the use of money as a medium of exchange.
• Place students in small groups and ask them to discuss whether the money or the goods would be easier to deposit in a bank.
• Ask students to share their discussions with the whole group. If necessary, explain that money is also a store of value. Money makes it easier to store value for future use.
• Discuss the characteristics of paper money that make it so widely used: durability, portability, divisibility, stable in value, scarcity, and acceptability. Explain that our money is acceptable because the government has declared that it is legal tender, for goods and services.

• Ask students to volunteer to define each of the following vocabulary terms:
  • barter
  • money
  • commodity
  • legal tender 
• Have students write a short paragraph called “Why I need money,” based on the lesson.