WHAT IS MONEY?

What is Money? A measure of value A medium of exchange

Money Comes in Many Formats Needs to be: Portable Divisible Practical Worthy of Value Transferable

Africa, Asia, Australia Cowrie shells –Rare –Convenient –Easy to carry –Could be divided Not manufactured, supplied by nature Value determined by rarity and demand for shells Used by native tribes

Ancient Money-Lydia 500 BC Made from “Electrum” - a natural mixture of gold and silver Uniform value regardless of weight or size Designs stamped on sides by the king

Early American Money Native American Indians created hooks from bone and teeth Well made hooks were difficult to make Hooks were a valuable commodity Hooks were used as money Colonists used tobacco, grain and fish as forms of money

Playing Card Money Canada 1600s-1700s Made from paper Convenient to make and carry Each card had to be hand signed by the colonial governor Do you think it would be easy to counterfeit?

Coins 1.More durable than the paper dollars 2.Convenient, easy to carry 3.Made from metal Alloy – mixture of metals (gold is soft) 4.Not easily divided into units, but were physically cut into “bits” to make smaller denominations “two bits, four bits, six bits, a dollar…..” - bits are ½ a quarter On coins with smooth edges, people would use knives to shave off the gold or silver and use “gold dust” to pay. Coins now have a ribbed edge to eliminate this practice.

Susan B. Anthony United States Coin Metal alloy Size and weight closely resemble US dollar Not readily accepted by American consumers because confused with quarter

US Currency Federal Reserve Notes –“Legal tender for all debts, public and private” Printed by Bureau of Printing and Engraving Division of US Treasury Department

U S Coins Minted by the US Mint –Denver –Philadelphia –San Francisco Division of US Treasury Department

The Face of Money Open the following website. Answer questions on next slide in your notebook on the class notes page. The Face of U.S. Currency | The Federal Reserve Bank of MinneapolisThe Face of U.S. Currency | The Federal Reserve Bank of Minneapolis

Answer these questions in your notebook. 1.What legal statement appears on every US bill? 2.Who signs all currency? 3.What is paper currency called? 4.What is the “Great Seal of the USA”? 5.Who prints Federal Reserve Notes? 6.Name three (3)cities that have a Federal Reserve Branch - besides Richmond.