Money And Credit

From Karnataka Open Educational Resources

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  1. Karnataka Text Book Class IX - Chapter 3 Money And Credit ಹಣ ಮತ್ತು ಸಾಲ => NCERT Text Book - Class 10th - Money And Credit

Additional References

How the topic is discussed in NCERT Books

Useful websites

  1. Wikipedia article on Money
  2. Wikipedia article on Credit
  3. Useful page on how money is used today with lots of pictures with simple explanations

Reference Books

Teaching Outlines

Please describe the key ideas to be conveyed in this section. Also broken down in details by each idea

Key Idea 1 - Introduction to Money and Credit

Purpose of Money Purpose of Credit Role of money and credit in modern economy

Learning objectives

Notes for teachers

Activity No #

  • Estimated Time
  • Materials/ Resources needed
  • Prerequisites/Instructions, if any
  • Multimedia resources
  • Relevant local connections - people, places and materials
  • Website interactives/ links
  • Process
  • What questions can you ask
  • Assessments - incorporating elements of CCE
  • Question Corner

Activity No 1 - Understanding role of money today

  • Estimated Time - 30 minutes
  • Materials/ Resources needed - pen,paper
  • Prerequisites/Instructions, if any - Make a list of daily activities in your home. Identify which involve money and which do not
  • Multimedia resources
  • Relevant local connections - people, places and materials
  • Website interactives/ links
  • Process
  • What questions can you ask
  1. What activities involve use of money, What do not?
  2. What expenditure is common to all houses, which are not so common?
  • Assessments - incorporating elements of CCE
  • Question Corner

Key Idea 2 - Evolution of Money

Learning objectives

To understand about the history and evolution of money as we know it today

Notes for teachers

Money, as we know it today did not always exist in its current form.

Barter system: In early days, around 9000 B.C., the barter system was used. Under this sysyem, goods were exchanged for other goods. For example, if you wanted had an extra cow and wanted some rice, you had to find someone who was wanted a cow and had some extra rice. This method was convenient in that day and age but it suffers from the following disadvantages: Double coincidence of wants: For successful barter, both parties would need to have what the other wants. Common measure of value: It is difficult to assign equal value to the goods to be exchanged. In the above example, how much rice is equal to one cow? Indivisibility of goods: Under barter, goods cannot be divided easily. In the above example, if you both decided that the rice was equal to half a cow, it is not possible to divide the cow in exchange for the rice. Difficulty of storing wealth: Since people usually used perishable goods to exchange, storing of wealth became difficult.

Because of these difficulties of the barter system, commodity money came to be used.

Commodity money: Because some commodities were demanded more than others (because of their utility), they became the standard of measurement and exchange. Some examples are cattle, salt, wood, sugar, cloth and tobacco. Some words we use today when talking about money, are based on some of these commodities. The word capital comes from the Latin word capita (head). The word salary comes from the use of sal (salt) in Rome as payment for services.

However, due to problems such as indivisibilty of commodities and problems of storing, commoduty money evolved into metallic money.

Metallic money: Metal was commonly used to make utensils and weapons. Because of advantages such as easy storage, divisibility, and convenience, metal became the accepted standard of value. At the beginning, it was used in its natural form, later as ingots, and further as objects such as rings and bracelets. Metal objects became valued commodities. These later evolved into the first coins, around 7th century B.C. Coins were small metal pieces, with fixed weight and value, bearing an official seal. The seal indicated who minted them and also a guarantee of their value. Gold and silver coins were common in Greece. Goldsmiths that minted the coins delivered receipts, as a guarantee. With time, these receipts were used to make payments, and eventually evolved into paper money.

Paper money: This became the accepted standard, and the government assumed the role of sole issuer of notes. Today, central banks of most countries are responsible for printing notes and minting coins as currency. In India, the Reserve Bank of India is in charging of printing money. For more information on how money is printed in India, visit this.

Bank money: Today, money is also in the form of cheques, bank drafts and credit/debit cards. They are more convenient than carrying large amounts of cash.


Activity No #

  • Estimated Time
  • Materials/ Resources needed
  • Prerequisites/Instructions, if any
  • Multimedia resources
  • Relevant local connections - people, places and materials
  • Website interactives/ links
  • Process
  • What questions can you ask
  • Assessments - incorporating elements of CCE
  • Question Corner

Activity No #

  • Estimated Time
  • Materials/ Resources needed
  • Prerequisites/Instructions, if any
  • Multimedia resources
  • Relevant local connections - people, places and materials
  • Website interactives/ links
  • Process
  • What questions can you ask
  • Assessments - incorporating elements of CCE
  • Question Corner

Key Idea #

What are the key ideas to be covered

Learning objectives

Notes for teachers

Activity No #

  • Estimated Time
  • Materials/ Resources needed
  • Prerequisites/Instructions, if any
  • Multimedia resources
  • Relevant local connections - people, places and materials
  • Website interactives/ links
  • Process
  • What questions can you ask
  • Assessments - incorporating elements of CCE
  • Question Corner

Activity No #

  • Estimated Time
  • Materials/ Resources needed
  • Prerequisites/Instructions, if any
  • Multimedia resources
  • Relevant local connections - people, places and materials
  • Website interactives/ links
  • Process
  • What questions can you ask
  • Assessments - incorporating elements of CCE
  • Question Corner

Project Ideas

  1. Visit to local bank

Visit a local bank and meet the Bank Manager and the staff. Discuss the different activities of the bank and how the staff is allocated different roles, such as- savings and deposits, loans and advances etc. Discuss if any changes have happened to the banks work over the last 10-15 years and how it has affected their work. Is the bank operations computerised? How was the work done before computerisation?

  1. Newspaper clippings

Daily there will be news items relating to money, banking and credit. Cut these and make a small set of clippings. You will note many terms like - interest rate, lending rate, working capital etc in articles on commercial banking. In case of articles related to central banking and public finance, you will see terms like - deficit, inflation, monetary policy, credit rate etc. Discuss these terms among yourselves. Also see the meaning and explanation for these terms in a dictionary or encyclopedia. You can refer to a dictionary or encyclopedia online such as Wikitionary or wikipedia respectively.

  1. Opening a bank account

Open a bank account in your name (along with your parents/guardians) at your local bank. What documents are required by the bank to open an account? Why?

Community Based Project

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