1. Intro to Money and Banking

2. Bartering
Before the existence of money, people used bartering to acquire goods they could not provide for themselves
Bartering is exchange of goods/services without using “money”
Even with the existence of money, some companies still take advantage of bartering today
E.g. bottled-water company exchanges water in a marathon in exchange for advertising and promotion

3. Barter Activity
Objective: Secure the animals you need in the right quantity
Rules:
Carefully record all transactions
You may not use violence to force a trade
Buy low, sell high
You can trade for more than what you need, then use the extras to trade for something else
You can trade with 1 person or several people to fill one animal need
Do not trade fractional units
You have 20 minutes
If you have a question during the activity, just ask

4. Barter Activity How many of you met all 6 needs?
What about 5 needs? 4 needs?
What are the problems with bartering?
It’s hard to know the value of goods without using monetary currency. Some animals are in surplus and some animals are scarce. These affect the trade value or the relative price of one animal compared to another. If you trade animals one for one with them having different values, one person is going to be the loser and the other who trade away animals that are worth less the winner

5. Easy to get
Hard to find
Equilibrium

6. Functions of Money Four Main Functions of Money: A medium of exchange
Measurement of Value
Store of Value
Standard of Deferred Payment

7. A Medium of Exchange
Money allows you to obtain goods and services without having to barter for them
Money should be easily carried, durable, hard to counterfeit

8. Measurement of Value
Money is the basis most societies use to determine the value of goods and services
With money, the value of all goods and services is measured in a term common to all things: price
Money makes it easier to compare of one item against another

9. Store of Value
People may want to save money for the future (emergency, vacation)
In the days of bartering, perishable items had to be traded immediately

10. Standard of Deferred Payment
People must be able to borrow money and give it back at a later date, with the added charge of interest

11. Bartering Success Story

12. Bank of Canada “Bank of banks”
Established by the federal government in 1934, it is Canada’s central bank
Most important function of the bank is to control the money supply, that is the total amount of money in circulation
The bank also issues our paper money in circulation, destroys old currency.

13. Legal Tender
Legal tender, as defined by the Government of Canada, must be accepted as valid payments
The two main forms of legal tender are coins and paper money
Coins are minted at the royal Canadian Mint in Ottawa, the head office, and in Winnipeg.
As discussed earlier, paper money (also known as bank notes) is issued by the Bank of Canada
Although Widely used and accepted as payments, cheques are NOT legal tender (they can be refused.