May 14, 2008
How money moves around
Aweird thing about money is that every time you spend it, another person earns what you spent.
When you buy a juice box for 50 cents, you pay the storekeeper with the money you spent for it. You are the consumer; he is the producer. You spend; he earns.
Then, when the storekeeper wants to buy something for himself, he will spend your 50 cents. The storekeeper becomes the consumer. The person he buys from, the producer, will earn that 50 cents. This shows us how money keeps moving all the time.
The grand total of all the money spent and respent from what is made to be sold is our gross domestic product (GDP). It is a good measure of the wealth of our country.
If consumers stop spending, producers stop making things to be sold. The GNP gets smaller, and the country gets poorer.
If consumers start spending, producers begin making more things to be sold. The GNP gets larger, and the country gets richer.
ACTIVITY
When you buy a car
One place lots of money goes is to pay for a car. Try these activities so that you can really understand how to spend wisely.
Find a display ad that shows a new car for sale and the same car for lease. Find each of these pieces of information and write it on another piece of paper.
* l Year and Make of Car
* l Original MSRP (manufacturer's suggested retail price)
* l Purchase Price
* l Features
* l Other information: interest rate, down payment required, etc.
After reading the ad carefully, determine how much the car will cost.
Find an ad showing a car for lease. Find each of these pieces of information and write it on the lines.
* l Year and Make of Car
_____________________
* l Lease Cost Per Month
_____________________
* l Number of Months
__________________________
* l Down Payment Required
_________________________
* l Security Deposit Required
__________________________
* l Other important information
__________________________
* l Total cost of car at end of lease
__________________________
Which seems to be the better deal, buying or leasing? Why is it important to read these ads carefully? Do you see any ways in which you think these ads may be misleading to consumers?
* If you are unable to find the same model car, compare two similar cars.
ACTIVITY
Money is big
News
Look in the newspaper for an article that is about money or mentions money. (Hint: Look at the headlines on page one or the front of the business section.)Write a summary of the article. Present your summary to the class. Do you think money is an important issue?
ACTIVITY
Money talk Vocabulary Match-Up
Inflation
Decides how much money to manufacture
M-1
High prices; too much money in circulation
Federal Reserve Board
Less spending, fewer jobs; too little money in circulation
Recession
Total money spent and respent from what is made to be sold
GNP
The total money in circulation
