The historical development of money

The historical development of currency can be set out to show four specific phases:

THE DEVELOPMENT OF GOODS CURRENCY, when primitive communities had no need for money because of the self-provident nature of their existence .

THE DEVELOPMENT OF METAL CURRENCY (COINS), which was easier to handle, more easily recognisable and of more constant value and therefore improved barter (trading by exchange.)

THE DEVELOPMENT OF PAPER CURRENCY because metal was too expensive, cumbersome and involved too much risk to be used as the only means of payment.

THE DEVELOPMENT OF CHEQUES AND CHEQUE DEPOSITS, which is the current basis of trade and exchange transactions in the present-day economy.

This development of currency or money continues and the modern trend is towards a “cashless” society in which all forms of credit card and electronic transfers are used for local as well as foreign payments.

Activity 4

DEVELOPMENT OF CURRENCY/MONEY

SELF:

Compile a list of all kinds of money and money–associated instruments that are in use in South Africa.

Activity 5

DEVELOPMENT OF CURRENCY/MONEY

GROUP:

Divide the “money” that was identified by the group into the following categories:

Activity 6

FUNCTIONS OF MONEY IN THE ECONOMY

GROUP:

Refer to the above to deduce the functions of money within the economy.

Activity 7

THE ROLE OF CREDIT CARDS

GROUP:

Compile a list of all the credit cards of which you have heard:

[LO 1.1]

Assessment

Learning Outcomes(LOs)

LO 1

the economic cycle

The learner will be able to demonstrate knowledge and understanding of the economic cycle within the context of ‘the economic problem’.

Assessement Standards(ASs)

This is evident when the learner:

describes the historical development of money and its role in societies and their economies;

discusses how trade (import and export) addresses the economic problem (choice and opportunity cost), as well as the role of banks in investing in the economy;

explains how different economic systems address the economic problem (e.g. planned, market and mixed economies);

discusses the role, rights and responsibilities of trade unions;

discusses the role, rights and responsibilities of trade unions;

Overview:

Overview of Modules:

ACTIVITY 1: Subsistence economy

GROUP:

Each group must provide a list of needs set out in a well-considered manner.

Characteristic features of the self-sufficient stage:

agricultural by nature – merely producing to provide own needs, very primitive.

No or very little division of labour – work done by members of the household.

Absence of money – products are traded.

Lack of expertise – only tradition and well-known customs are relevant.

No transport or communication – messengers only.

May result in wealth – the wider the sphere of influence / production, the greater the wealth.

ACTIVITY 2: Specialisation

SELF:

Building a model of a house with cardboard: evaluate ingenuity, planning, etc.

ACTIVITY 3: Specialisation and division of labour

GROUP:

Building a house from cardboard: evaluate participation, ingenuity, planning, etc.

ADVANTAGES OF SPECIALISATION DISADVANTAGES OF SPECIALISATION

ACTIVITY 4: Development of currency/money

SELF:

List of money and money-associated instruments : banknotes, coins, deposits, cheques, credit cards, traveller’s cheques, bank transfers, postal orders, money orders, etc.

ACTIVITY 5: Development of currency/money

GROUP:

CURRENCY: MONEY-ASSOCIATED INSTRUMENTS

Banknotes, coins and deposits only Credit cards, cheques, traveller’s cheques, etc.

ACTIVITY 6: Functions of money in the economy

GROUP:

1. Medium of exchange: currency can be exchanged for other articles – generally accepted.

2. Measure of value: value of goods expressed in terms of currency- can be compared.

3. Bearer of value: currency retains its value over time – stockpiling medium.

1. Standard for deferred payment: debt is repaid over a period of time.

ACTIVITY 7: The role of credit cards

GROUP:

Different credit cards : Master, Visa, American Express, Clicks card, etc.