In a barter system, people have to trade goods and services for other goods and services. In an economy that produces millions of goods and services, barter is very difficult. Think of all the stuff (goods and services) you have. What if you and your parents had to trade other stuff to get your stuff? What if your mom and dad were paid in stuff rather than in money?
That is why we have money. Money makes it easier to produce and exchange goods and services. Because of money, the economy becomes more efficient and people can get more stuff. It is the stuff, not the money, that people really want. But without good money, we cannot get more stuff.
Therefore, money serves as a medium of exchange. All this means is that people exchange money for goods and services.
But people cannot exchange money for goods and services if they can not trust the money. If someone gives you counterfeit, bogus or fake money, for stuff, you are just stuck. They have the stuff, and you have nothing in return. You have nothing to trade for something else because that money is no good. That is why the government tries to make it difficult to counterfeit money. Let us see how they do this.
How about a close up look at a $100 bill, the one redesigned in 1996? Visit the Anatomy of a Bill
Click on different parts of the bill to learn about it. Did you realize that our bank notes have so many details? Share some things you have discovered with classmates.
The location "Anatomy of a Bill: the Printed Elements ," has more information and pictures of the actual printing process. Look for details of intaglio printing, color-shifting, the hidden messages of micro-printing, and the use of serial numbers.
When you get to the bottom of the printing page screen, click on "Anatomy of a Bill Paper." This part of the lesson tells how money is protected from counter- feiters.
Explain five things the government does to make it more difficult to counterfeit a $100 bill.
- Why did the government make it more difficult to counterfeit a $100 bill?
At the next site you can be a Bogus Bill detective and investigate a bill to see if it is real or not. How many errors can you spot?
Ask, "Bill, are you bogus?"
We know "making money" is hard but did you realize how really complicated the actual process is? Share what you have learned with your family tonight.