The American currency system uses the dollar as its base.
For many students, economics means nothing more than whether to buy a pizza for lunch or save money for an after-school soda. But economics actually plays a major role in life. At the root of economics is currency. Currency is defined dually, by the Columbia Encyclopedia, as, "The abstract unit of account in terms of which the value of goods, services, and obligations can be compared; and ... a means of payment." For a more complete understanding of currencies of the world, focus your project or activity on both of these concepts.
Foreign Exchange Rates
Perhaps the most important section of any currencies of the world project is understanding foreign exchange rates. The Gale Encyclopedia of U.S. Economic History defines the foreign exchange rate as, "The price of one country's currency in terms of another country's currency."
Instruct your students to compare the currencies of four different countries -- the United States, Great Britain, China and Mexico, for example. The students then compare the cost of different goods from these countries, such as comparing the average cost of jeans in the United States (using dollars) and the average cost of jeans in Mexico (using pesos).
History of Currency
Older coins were often made from precious metals.
Create a section that guides your students through the history of currency, beginning with barter systems and ending with modern currency. At the end of the section, instruct your students to choose one historic currency and compare that money to the United States dollar. For example, if a student chooses the bartering system, that student should focus on how the bartering system differs with modern systems (for example, asking if the individual's needs mattered more than a culture's needs). Additionally, the student could show how the currency system allows for more or less long-term possession of wealth than an agricultural bartering system.
Commodity and Fiat
Common American currency is fiat currency; while fiat currency has no intrinsic value, the value comes from a governmental order that establishments must receive it as if it had value. This differs from the commodity form of money, where the money itself possesses value (such as gold or silver coins).
Instruct your students to look at the different aspects of fiat money and commodity-based coins, including the economic benefits and problems with each. For example, how do gold coins and credit cards compare in carrying safety?
Currency and Life
As more and more people grow connected through the global marketplace, national currencies fluctuate according to rules of the market. These fluctuations affect the lifestyles of the people living within a nation.
Within a currency project, show the relationship between currency values and standards of living. Instruct the students to determine whether stable or unstable currency values reduce or increase the average standard of living. Additionally, look at whether changes in average lifestyle cause changes in currency value.
