How Money Works

What is Money?

Money

• Money is a type of currency.

• Currency = something that is used as a “medium” to exchange.

• In other words, you can use it to exchange things with.

Different Kinds of Currency

The most widely used currency in the world are:• Gold• Dollars• European

dollars called “Euros”

Dollar Bill Facts• All US Bills are cloth, not paper – 25%

Cotton, 75% Linen with red and blue synthetic fibers distributed throughout.

• The US prints 16,650,000 $1 bills each day.

• The $1 bill has an average lifetime of 18-22 months.

• Damaged bills are shredded. Recently, the Fed destroyed around $7.5B worth of currency.

Exercise:Dissecting The US Dollar

The US Dollar

What Do You Think This Means?

Do You Know What This Means?

• Legal tender means that everyone is legally required to accept it.

• This is the government’s stamp of approval.

• So you can trade it for any goods or services.

Money Took The Place of Trading

• Before, you could only get something you wanted by trading something for it.

• But if you didn’t have what they wanted you were stuck.

• Money made it possible for you to trade for anything because people were legally required to accept it.

Lesson Review

• Money is a form of currency.• Currency is something you can use

to exchange things with.• The major currency of the world

are Gold, Dollars and Euros.• The US Dollar is “Legal Tender”

means that the government requires people to accept it.

• Because of this you no longer have to trade but you can use money to buy what you want.