ECONOMICS
MONEY AND BANKING
RESOURCE UNIT
NEARBY HISTORY:
A SUMMER INSTITUTE FOR EDUCATORS
ED 770
DR. RONALD HELMS
JUDITH RICHARDS Summer 2002 TABLE OF CONTENTS
INTRODUCTION 1
CONTENT
SUMMARY 2
CONCEPTS/VOCABULARY 3
OBJECTIVES 4
ACTIVITIES 6
EVALUATION 9
INSTRUCTIONAL RESOURCES
TEACHER REFERENCES 11
STUDENT REFERENCES 12
MEDIA REFERENCES 14 INTRODUCTION
This is the introductory unit for the elective course in Economics which covers ten block classes of 90 minutes each. According to the Spring 2002 Draft of Social
Studies Content Standards, senior high school students will “acquire a working knowledge of major economic concepts, issues and systems in order to develop economic reasoning skills used to make informed choices as producers, consumers, savers, investors, workers and citizens in an interdependent world.”
The general theme of this unit revolves around money – how it came into existence, how the use of it became more sophisticated over time, how various institutions, societies, economies and governments have been created and destroyed because of it. CONTENT
SUMMARY
The unit is based upon the fact that without money in today’s modern society there would be no way to get the goods and services everyone wants and needs. Among other things, money makes it easy to set values for things which allows exchanges to take place.
The economic evolution of the state of Ohio in general and the city of
Dayton in particular from the late 18th century through the end of the 19th century is the methodology used to approach the draft Social Studies Content standards. This time frame neatly encapsulates and reflects the basis of any economic system from barter through maturity with particular emphasis upon the functions of money and banking.
The unit concludes with a working definition of the three basic economic systems, a comparison of selected nations’ actual economic systems, their level of economic maturity and overall contemporary effectiveness in providing for their own people.
2 CONCEPTS/VOCABULARY acceptable exchange rate stable ague factors of production stock bank collapse flatboat stockholder bank run hoard store of value barter homesteaders supply benefit incorporate Supreme Court bill initial surveyor blazed interest trade bond investors title capital levee unconstitutional cashier loan vault charter measure of value wants clearinghouse medium of exchange workers coin Miami Purchase standard of deferred commerce militia payment conservative money trade-off consumers navigation poverty cost near money capitalism counterfeit needs communism currency par socialism default passbook cashless money demand pirogue risk demand deposit pivotal profit democracy portable free enterprise deposit producers depositor property rights depreciate reimburse depression river current distillery savers divisible scarcity dues shin plaster durable society economic system economics
3 OBJECTIVES
The students will be able to accomplish the following:
1. Identify two reasons why everyone should study economics.
2. Define barter, counterfeit, economics, economic system, money, needs and wants.
3. Demonstrate how the barter system works and why it is inadequate.
4. Complete Land of Mocha quiz with 80% accuracy.
5. Outline how money has been transformed through the ages.
6. Define and discuss the four functions of money.
7. Discuss the threat posed by counterfeiting.
8. Explain orally a Money Facts Related Topic.
9. Research the history and production of US currency.
10.Design personalized type of currency.
11.Explain scarcity and the need for trade-offs.
12.Contrast scarcity and poverty.
13.Analyze how scarcity affects supply, demand and economic choices.
14.Compare and contrast the importance of the factors of production.
15.Interpret the evolution of financial institutions in Dayton.
16.Tell why the money supply is so important to an economy.
17.Describe the different kinds of financial institutions and the roles they play.
18.Identify geographic underpinnings of early Dayton’s economic decisions.
4 19.Outline the five basic economic questions every society must answer.
20.Illustrate the differences between wants and needs.
21.Track Ohio’s development from barter to a modern system of money and banking.
22.Compare Ohio’s economic development with economic development theory.
23.Analyze why Ohio’s steps proceeded in this manner.
24.Generalize concerning the role government and geography played in Ohio’s economic development.
25.Describe the five characteristics of a free enterprise system.
26.Evaluate the positive and negative effects of the government’s role in our free enterprise system.
27.Compare and contrast the characteristics of the three major economic systems worldwide.
28.Select a foreign nation with a population of at least one-half million.
29.Research values, beliefs, economic conditions and problems of the selected nation.
30.Orally present researched nation to class including items designated in item 28.
31.Compare how values and beliefs influence economic decisions in different societies.
32.Develop decision-making skills.
5 ACTIVITIES
As this is an introductory unit, activities will be concerned with proceeding from general to specific. The approach will be to look at economic theory and its fit with the reality of Dayton’s first century and also the reality of the economic world of today.
Testing and the resultant scoring of student performance are not included in the listed activities but they are understood to occur as a matter of course throughout the unit.
Activities include a walk about of downtown Dayton, reading and discussion of various texts and handouts, a strong and repetitive use of designated web sites, games, etc.
STUDENTS WILL:
construct a paper basket, pin it to the bulletin board - during the course of the unit select a money or banking theme and fill their basket with information concerning their topic
view film “Land of Mocha” which clarifies the concept of barter within an economy - discuss handout and decide by majority rule if the Mochans were on the right track
play Barter Game - discuss and list on board the difficulty in reaching the game’s goal as well as the inadequacies of a barter system
observe monetary artwork and pictures covering thousands of years and consider what has come to be the concept of money and what factors created this transfor- mation
decide after discussion amongst themselves if the nature of a specific money is merely a reflection of that particular society and/or whether or not other factors are at work
6 ascertain the four functions of money by reading handout “What Money Really Is” engage website “Money is What Money Does” and test themselves on how well specific items would perform the functions of money go online to read two Washington Post Currencies in Crisis articles and answer questions contained therein pose as Democrats and Republicans in the Senate - take a United States Government position and defend it concerning Argentina and the Beanie Babies present orally to class 26 Money Facts Related Topics researched online play online the counterfeiting game Get Real or Get Taken (timed) with highest score receiving prize research online American Currency Exhibit’s Fun Facts about Money by the Federal Reserve Bank of San Francisco to gain knowledge about the history and production of our money design and produce a type of currency that will reflect the information gained about our American currency and the lengths the Unites States Government will go to counteract counterfeit money by group present to class in story form the handout “Early Dayton: An Economy Developing from Barter to National Banking Leadership 1787-1890” walk about Dayton’s downtown area including Monument to Jefferson as well as the river trail highlighting the geographic underpinnings of economic decisions made by early Daytonians role play a chosen major 19th Century Dayton character including within the play the personal and political elements that helped define what Dayton became in that era – placement among the top three financially secure banking cities in the US play game Dayton Who’s Who Koosh Ball as a fun means of reinforcing for all class members the key Dayton society developers and their economic justifi- cations set up comparison charts outlining Dayton’s and Ohio’s economic development with that of economic theory (point of reference – Why was Dayton during the 19th Century pulling the state of Ohio along on its coattails?)
7 on chalk board, as a result of group discussions and evaluations, list main elements of the three major economic systems worldwide including the primary individual(s) associated with and the rationale for the development of each system
select from the online CIA site a foreign nation with a population of at least one- half million and present to class in form chosen by student the nation’s pertinent economic data to include but not be limited by the questions contained in the teacher’s handout using news conference style, defend the most important element of the above activity, i.e., why student chose this particular nation as more interesting in economic development than any other
8 EVALUATION
TEST – ECONOMIC EVOLUTION
NAME______
Multiple Choice
Circle the correct answer.
1. Gold was rejected as a common form of money because it was a. very heavy and awkward to carry around. b. hard to divide into small amounts for everyday transactions. c. too scarce by the late 19th century to have enough to go around. d. all of the above e. a and b only f. a and c only
2. The four factors of production are a. land b. entrepreneurship c. resources d. economic goods e. labor f. capital
3. Adam Smith wrote a. the Communist Manifesto. b. Ulysses. c. the U.S. Constitution. d. the Wealth of Nations. e. a and d. f. none of the above.
9 4. In a communist country basic economic questions are answered by a. the state Judicial system. b. the state Legislative system. c. the people. d. the government. e. the leader of the country. f. all of the above.
5. Which of the following is(are)basic economic question(s)? a. what should be produced, b. how should products be produced, c. how much should be produced, d. how to distribute the product, e. all of the above, f. a, c and d only.
True/False
Circle the correct answer. If false, explain why
T F 1. Banks can increase spending power and print money.
T F 2. Money has value because it can be loaned, borrowed and has purchasing power.
Essay
Answer each question in four sentences or less.
1. Explain when and why counterfeiting occurred in the early 1800’s in Dayton. Was it successful? Why or why not?
10 2. What are the five basic economic questions?
TEACHER REFERENCES
Wall Street Journal Dow Jones &Company A daily international newspaper that covers all aspects of micro and macroeconomics in relation to the comings and goings of the business world.
AskERIC Economic Lesson Plans http://askeric.org/cgi-bin/lessons.cgi/Social_Studies/Economics
A detailed compilation of economic lesson plans including conceptual analysis in economics, entrepreneurship, consumer borrowing, savings, etc. The most outstanding is Teaching Basic Banking Principles which takes a humorous approach in showing how banks create money and what a run on a bank is.
Center for Entrepreneurial Leadership Clearinghouse on Entrepreneurship Education http://www.celcee.edu/
A collection of free digests and publications covering a variety of topics relating to economics. Economic items based on historical interpretation and future expectations are also included.
The Pursuit of Wealth McGraw Hill
The author, Robert Sabel, details the myriad ways that people have chased after money, business, investing and risk. He also reveals how the methods of wealth accumu- lation have changed dramatically in 5,000 years.
The Global Financial System 1750-2000 Reaktion Books Ltd.
This book traces the evolution of today’s highly integrated financial system from its origins around 1750. Larry Allen, the author, also outlines the role of private merchant bankers such as the Rothschilds.
11 STUDENT REFERENCES
Akers, Kathy and Montgomery, Janine. (1994). Let’s Discover Ohio. Kettering, Ohio: Schuerholz Graphics.
An easy-to-read illustrated version of the history of Ohio. Also included are many hands-on projects students can perform.
Brown, Fern G. (1981). The Great Money Machine. New York: Julian Messner.
This book chronicles the workings of a bank from an initial deposit through the Federal Reserve System. It contains photographs and a glossary.
Burkett, Lauree and Allen. (1977). Money Matters for Teens. Chicago: Moody Press.
A well-written, fast-paced discussion of the power of money that is available to teens. Short and long-term planning, credit, types of bank accounts, savings, etc. are discussed.
Cribb, Joe. (1990). Money. New York: Alfred A. Knopf.
This is an excellent reference of the evolution of money within different societies. The numerous pictures are full color and in beautiful detail.
Fodor, R. V. (1980). Nickles, Dimes, and Dollars. New York: William Morrow and Company.
This book is a discussion of what money really is and the use of it in international markets. Wall Street and the financial market is also discussed.
Howe, Robert T. (1992). OHIO our state. (1992). Cincinnati: Roblen Publishing Cc.
This is an excellent book that covers all facets of Ohio history including geography as well as economics.
12 Knepper, George W., Miller, Mary Ann and Stewart, J. Mark. (1992). OHIO The Heart of It All. Cleveland: Modern Curriculum Press.
This textbook has a good discussion of the economic growth of Ohio. It relates various topics to the rise of industry and manufacturing and carries these ideas through to the present day.
Maestro, Betsey. (1993). The Story of Money. New York: Clarion Books.
This book begins in prehistoric times and traces the use of money through five thousand years of recorded history to modern times. Artwork is used instead of photographs.
Scott, Elaine. (1981). The Banking Book. New York: Frederick Warne & Co., Inc.
Information is provided on how a bank is started and run. Also included is the means by which a bank uses money to make money.
Tattersall, Clare. (2000). The Young Zillionaire’s Guide to Money and Banking. New York: Rosen Publishing Group, Inc.
This book discusses the origin and role of money in our economy. It also covers how banks operate to generate interest on savings and how the banking system works as a whole. Included in this book is a list of web sites on money and banking.
13 14 MEDIA REFERENCES
CD-ROM
American Currency Exhibit. (1999). Federal Reserve Bank of San Francisco.
Period music and historical images are included in this history of American paper money from the Colonial Era through the modern electronic age. Also included are curious facts and important icons of artistry and imagery.
MAP
Robert Patterson’s Dayton Purchase. (1976). Drury Printing Co.
A detailed line drawing of the more than 2000 acres Patterson purchased from Daniel Cooper in 1804.
The Rivers of the Miami Purchase. (1995). Celebration Dayton ’96.
A sketch of all the rivers within the Miami Purchase. This includes the location of Dayton as well as the location of the rivers in relation to the state of Ohio as a whole.
BULLETIN BOARD
U. S. History Time Line. (1999). Carson-Dellosa Publishing Company, Inc.
A pictorial representation of major occurrences in American history
Banking in Baskets.
Each student will select a money or banking theme, i.e., shin plasters, barter, etc. Each will construct a paper basket from supplies provided by the teacher. The basket will be filled with information concerning their topic and pinned to the bulletin board.
15 POSTER
Your Money Matters. (1997). Office of the Treasurer of the United States.
This highlights eleven features included in each dollar produced by the U.S. Mint with an explanation of each of the security items that are place in the dollar as a protection against counterfeiting.
American Currency. (1999) Federal Reserve Bank of San Francisco.
Colorful poster that details the evolution of American paper money through the Colonial Era, Civil War, creation of the Federal Reserve, and modern electronic age.
GAMES
Barter Game
Each student randomly selects a card which tells them which item they own and what is its equivalent trade. They must find the student with the equivalent trade item and try to persuade them to make the trade. There is no way to pay for any item. Trading items is the only way to move on. The first person that reaches the final trade to gain the diamond ring wins.
Get Real or Get Taken http://www.moneyfactory.com/cd042500/start
Audio game that is based on counterfeiting techniques and the ability to thwart them.
Dayton Who’s Who Koosh Ball
The teacher throws the ball to a student who lists the name of a prominent Daytonian on the board and one example of this individual’s economic influence within the Dayton community. This student then throws the ball to another student who lists another individual and his/her contribution and so on. Each correct answer per student is worth 25 points. A miss is worth zero and the student must wait to be chosen again by a pitcher.
16 WEB
The World Factbook http://www.cia.gov/cia/publications/factbook
A full color alphabetized reference containing historical, geographical, social and economic information for every country in the world. Maps are also included. Excellent reference material for high school students. Produced by the CIA.
Money is What Money Does http://www.econedlink.org/lessons/print.cfm?lesson=EM133
An introduction into the wide variety of items that have served as money. Items are judged on how well they accomplish the functions of money. A short activity is included ascertaining how well specific items would perform the functions of money.
Currencies in Crisis: Proposals Draw Fire http://www.washingtonpost.com/wp-srv/business/longterm/feb99/currency/currency7
Excellent discussion of the rationale for adopting the US dollar as “legal tender” for Argentina including the functions where the Argentinian peso falls short.
Currencies in Crisis: A Beanie Baby Guide to a Grown-up Problem http://www.washingtonpost.com/wp-srv/business/longterm/feb99/currency/baby7
The buying and selling of currency is discussed with a parallel drawn to the supply and demand of beanie babies.
VIDEOCASSETTE
Land of Mocha. (1976) Joint Council on Economic Education.
This is a 26 minute animation that includes means of exchange, methods of production, scarcity of resources, economic stability and other aspects of an incentive market.
LAND: AMERICAN FREE ENTERPRISE. (1978) Phillips Petroleum
One of a wonderful series presented by Phillips Petroleum about the American free enterprise system. Although it is dated by its costumes, it content is as relevant today as ever. There is a very good synopsis of the quest for land by Americans and how that relates to our economic and financial growth and stability.
17 Savers And Borrowers. (2000) Federal Reserve Board of San Francisco
Video discussing various savings and investing options as well as some classroom activities.
OVERHEAD PROJECTOR
Story of Money. (1993) Betsey Maestro
*Scanned artwork of barter evolution.
Money. (1990) Joe Cribb
*Scanned pictures of evolution of money around the world.
Factors of Production. (1997). Marketing Essentials Glencoe/McGraw-Hill
Transparencies detailing the resources used in producing goods.
*CD used in conjunction with electronic overhead projector.
18 LESSON PLANS DAY 1
OBJECTIVES Identify two reasons why everyone should study economics. Define: barter, economics Demonstrate how the barter system works and why it is inadequate
REVIEW NA
INTRODUCTION Is economics too remote and abstract for the average person? Imagine a world with no money. How would you get the goods and services you want?
GUIDED PRACTICE Read with students: Land of Mocha handout of salient points Discussion after game: Was it hard or easy to get to your goal? Why is the barter system inadequate?
INDEPENDENT PRACTICE Barter Game
ENRICHMENT Film: Land of Mocha
PROFICIENCY RELATED Reading, citizenship
CLOSURE Were the Mochans on the right track?
REMEDIATION One-on-one
19 DAY 2
OBJECTIVES Define: Money Outline how money has been transformed through the ages Complete Land of Mocha quiz with 80% accuracy
REVIEW Reasons for studying economics Definition of economics, barter Inadequacies of barter system
INTRODUCTION Does the introduction of money represent a more sophisticated economy?
GUIDED PRACTICE Trace evolution of barter throughout the ages Discuss: Different forms money can take
INDEPENDENT PRACTICE Quiz: Land of Mocha
ENRICHMENT *CD: Scanned artwork Story of Money by Betsey Maestro Scanned pictures Money by Joe Cribb
PROFICIENCY RELATED Reading, writing, citizenship
CLOSURE Is the nature of a specific money a reflection of that particular society? Why or why not?
REMEDIATION One-on-one
* CD used in conjunction with electronic overhead projector
20 DAY 3
OBJECTIVES Define and discuss: Four functions of money
REVIEW Definition of Money
INTRODUCTION The use of money makes it easy to set values for things.
GUIDED PRACTICE Evaluate: Quiz results Read and discuss with teacher’s implementation: What money really is Excerpts: Nickles, Dimes and Dollars by R.V. Fodor.
INDEPENDENT PRACTICE Read and answer questions: Currencies in Crisis: Proposals Draw Fire A Beanie Baby Guide to a Grown-up Problem
ENRICHMENT Money is What Money Does http://www.econedlink.org/lessons
PROFICIENCY RELATED Reading, writing, citizenship
CLOSURE What is money and why do we need it?
REMEDIATION One-on-one
21 DAY 4
OBJECTIVES Define: counterfeiting Discuss the threat posed by counterfeiting Explain a Money Facts Related Topic
REVIEW Four functions of money
INTRODUCTION During WWII, from 1942 through1944, all US currency issued in Hawaii bore the “Hawaii” overprint to insure identification should they fall into enemy hands. This is one of the many tricks of the trade of the Bureau of Engraving.
GUIDED PRACTICE Teacher will conduct classroom discussion of counterfeiting using imput students gained from playing the game.
INDEPENDENT PRACTICE Oral Report: Each student will choose one from 26 Money Facts Related Topics and present a short oral report to class. http://www.moneyfactory.com/document.cfm/18/94
ENRICHMENT Game: Get Real or Get Taken http:///www.moneyfactory.com/cd042500/start.html
PROFICIENCY RELATED Reading, citizenship
CLOSURE To what lengths does the United States Government go to counteract counterfeit money?
REMEDIATION One-on-one
22 DAY 5
OBJECTIVES Research the history and production of US currency Design personalized type of currency
REVIEW Counterfeiting
INTRODUCTION Money has not always looked as it does today. Our history is tied with our currency.
GUIDED PRACTICE Read with students: Fun Facts about Money published by the Federal Reserve Bank of San Francisco
INDEPENDENT PRACTICE Students will research the following web site to gain knowledge about the history and production of our money including the following: Showcase of Bills, Exhibit by Era, Historical Context, Artistry & Imagery and Index of Bills http://www.frbsf.org/currency
ENRICHMENT Student will design and produce a type of currency that will reflect the information gained about American Currency during yesterday and today’s class periods.
PROFICIENCY RELATED Reading, writing, citizenship
CLOSURE Is it true that our history is tied to our currency? Why or why not? REMEDIATION One-on-one
23 DAY 6
OBJECTIVES Explain scarcity and the need for trade-offs Contrast scarcity and poverty Analyze how scarcity affects supply, demand and economic choices Compare and contrast the importance of the factors of production Define: economic system Tell why a money supply is so important to any economy Interpret the evolution of financial institutions in Dayton Describe the different kinds of financial institutions and the roles they played in Dayton’s economy
REVIEW Production of US currency
INTRODUCTION The beginning of Dayton is simply a microcosm of any society’s attempt to create a viable economy. Why?
GUIDED PRACTICE Read and discuss: EARLY DAYTON: AN ECONOMY DEVELOPING FROM BARTER TO NATIONAL BANKING LEADERSHIP 1787-1890
INDEPENDENT PRACTICE Students will complete handout by answering questions concerning objectives in relation to the above reading.
PROFICIENCY RELATED Reading, citizenship
CLOSURE When did Dayton establish an economic system?
REMEDIATION One-on-one
24 DAY 7
OBJECTIVES Identify geographic underpinnings of early Dayton’s economic decisions
GUIDED PRACTICE Students will accompany teacher on a walk about Dayton’s downtown. It will include Monument from Wilkinson to Jefferson as well as the river trail. Various locations and individuals discussed in my Nearby History Summer Institute Report:
EARLY DAYTON: AN ECONOMY DEVELOPING FROM BARTER TO NATIONAL BANKING LEADERSHIP 1787-1890
will be highlighted on the tour. This will enable students to visibly understand the geographic underpinnings of certain economic decisions made by early Daytonians.
25 DAY 8 OBJECTIVES Outline the five basic economic questions every society must answer Illustrate the differences between wants and needs Track Ohio’s development from barter to a modern system of money and banking Compare Ohio’s economic development with economic development theory Analyze why Ohio’s steps proceeded in this manner Generalize concerning the role government and geography played in Ohio’s economic development Describe the five characteristics of a free enterprise system Evaluate the positive and negative effects of the government’s role in our free enterprise system
REVIEW What is an economic system?
INTRODUCTION Why was Dayton pulling the state of Ohio along on its coattails during the 19th Century with regard to money and banking?
GUIDED PRACTICE Read with students: Excerpts: OHIO our State by Robert Howe
INDEPENDENT PRACTICE Students will complete handout by answering questions based upon objectives relating to above reading.
ENRICHMENT Game: Dayton Who’s Who Koosh Ball
PROFICIENCY RELATED Reading, writing, citizenship
CLOSURE Dayton’s money and banking policies during the 19th Century placed it among the top three financially secure cities in the US.
26 DAY 9 OBJECTIVES Compare and contrast the characteristics of the three major economic systems worldwide Select a foreign nation with a population of at least one-half million Research values, beliefs, economic conditions and problems of the selected nation
REVIEW What are the 5 characteristics of a free enterprise system?
INTRODUCTION What do we mean by the term “third world country”?
GUIDED PRACTICE Read and discuss with students: Handout outlining the three major economic/political systems
INDEPENDENT PRACTICE Research: Students will research any or all of the following sources to understand the particular economic conditions and problems associated with the nation of their choice: World Atlas, Encyclopedia, Oxford Economic Atlas of the World, United Nations documents and the web site below. http://www.cia.gov/cia/publications/factbook/index.html Criteria: 1. Select any nation with a population of at least one-half million 2. Learn all you are able about its terrain, educational system, balance of payments, political and economic organization, climate, state of the arts, commerce and economic development.
PROFICIENCY RELATED Reading, writing, citizenship
CLOSURE Most nations in the world are not rich or economically sound.
27 DAY 10
OBJECTIVES Present researched nation to class Compare how values and beliefs influence economic decisions in different societies
REVIEW Three major economic systems worldwide INTRODUCTION
GUIDED PRACTICE Teacher directed class discussion comparing values and beliefs that influence economic decisions in different societies.
INDEPENDENT PRACTICE Oral Report: Students will give an oral report on their chosen country covering the topics designated in the research assignment.
PROFICIENCY RELATED Citizenship
CLOSURE The reason to study economics is to make intelligent choices. In all societies, most of the people work. All nations and societies have some form of governing system (government). The interaction between the societal beliefs and the governing system dictates the flexibility, effectiveness and sometimes, duration of any economy.
REMEDIATION One-on-one
28