Trade Offs: Why Money?

Why do people trade? Why does money make trading easier? Watch for two things that can be used as money. The Canadian Foundation for Economic Education and the Joint Council on Economic Education present Tradeoffs. [music] [music] Morning. >> [music] [music] >> What are we looking for, Christina? A skateboard. I want a skateboard. There isn't any skateboard up here. This is all old junk from a million years ago. First you look, then you find. Philip has a great skateboard. >> That's the exact skateboard I'm looking for. >> Is Philip skateboard up here? >> No, silly. But there might be something I could trade for Philip's skateboard. >> Oh, she going to barter something. >> No, I'm going to trade. >> Barter, trade? What's the difference? Num num. So, let me put it this way. What will you exchange for Philip's skateboard? >> Oh, this lamp. Maybe that. What would Philip want with a yucky old lamp? >> That's the lamp daddy's aunt Matilda gave him for his 21st birthday for being her favorite nephew. He hates it. Why do you want it, Christina? >> I want to trade it to Philip for his skateboard. >> Why would Philip want an ugly old lamp instead of a skateboard? >> Can I have it, please, mother? >> All right, you can have it. Bye. >> Bye. [music] >> Sure, I'm willing to trade my skateboard. I can always use my brothers. What are you offering, >> Phillip? I guess you'd have to call it a work of art. >> Like what? >> This. Ah, what would I want with a yucky old lamp? >> It's an antique. >> Well, I don't care. I don't want it. >> All right, then. What do you want? >> What do I really want? A used electric train that's in good shape. For that, you can have the skateboard. >> An electric train. I'll be back. Think Martin. Think of somebody who has a used electric train that's in good shape. Alice has a new electric train, so maybe she's tired of her old one. Thanks, Martin. See you later. I'm willing to trade my old train and it's in good shape, too. What are you offering? Something wonderful. You'll love it. What is it? this. What do I want with a yucky old lamp? Forget it. Well, I'd like to, but if you don't want this, then tell me. What do you want? Well, I'd like a rocking chair for Schne. Who? Schneave. My big stuffed dog. Oh, okay. I'll be back. A small rocking chair for a giant toy dog. No wonder. >> Someone must have one. Mrs. Fry used to have a lot of children, but they're all grown up now. I bet she has a small rocking chair that'd be just right for a giant toy dog. >> Well, bless my soul, Christine Nunan. I believe I do have a small rocking chair. One that would be just right for a giant story dog. >> Well, if you are willing to trade, Mrs. Fry, I can give you a chance to become the proud owner of a beautiful treasure from the past. >> What sort of a beautiful treasure, dear? >> This. >> My That is lovely, isn't it? >> You mean you like it, Mrs. Fry? You mean you'll trade? >> Well, no. I mean, I have four just like it already. And I think four of anything is enough, don't you? >> Well, if you don't want this in trade for your small rocking chair for the giant toy dog, what do you want? >> Well, I could really use a couple of big ripe pumpkins so that I can make some pumpkin pies. >> Pumpkins? Right pumpkins. So Mrs. Fry can make some pumpkin pie on the beach road. [music] >> Well, what are you going to offer me for these pumpkins? >> This It's a beauty. All right. But it's not right for me. All our lamps match. >> This one just wouldn't look right. >> That's too bad. >> But is there anything else you'd trade for? >> Well, I'd trade two of these really beautiful pumpkins for a mounted duck. >> A mounted duck? >> Yep. One I can just put right up over my fireplace. It look really good there. A mounted duck. A mounted duck. Can't you put over your fireplace? You know, from hunting. >> Well, the only place I can think of is maybe in Mr. Simon's antique shop on Harbor Street. >> Well, I'll give it a try. See you. >> Good luck. That's a handsome mount of duck you've got there, Mr. Simons. >> Hello, Christina. Well, I've seen better and I've seen worse, but I haven't seen many. >> I know what you mean, Mr. Simons, but would you be willing to trade that handsome mounted duck for a beautiful work of art that's also very rare? >> You know, I might. What do you have on your mind to trade for it? this. >> Well, I'll be darned. You know, if I'm not mistaken, I think that's the same lamp I sold to Miss Matilda Benson many years ago. >> Matilda Benson is my great aunt Matilda. My father's her favorite nephew. She gave it to him. >> Well, do you know that's a genuine Applebee? I think I'd be willing to trade that duck for that beautiful lamp. >> You mean it? >> You bet. >> You'll trade right this minute. What better time? >> Okay, Mr. Simons, here's your lamp. >> And there's your mounted duck. >> Thanks. >> Bye >> bye. Here's [music] the electric train film. Oh boy. >> And look, it's in really good condition. >> Let's see. Gee, an oldfashioned engine and everything. It's just what I wanted. So, where's your skateboard? Oh, I gave it away. You what? You did what? Do you realize the trouble I've gone through just to get that electric train for you? Do you realize I've been running around for two days trading things to everybody in the world? How could you give the skateboard away? >> Relax. I was just kidding you. Here's the skateboard. >> Wow. Thanks, Phillip. It's beautiful. My very own skateboard. Look, I got it. Most beautiful skateboard in the world is mine. >> Nice. >> Terrific. >> But didn't you get it by trading Aunt Matilda's old lamp for Phillip? >> I sure didn't. I traded him an electric train. >> Oh, good. >> That's a relief. And Matilda just called and she's coming over for a visit in an hour. And she particularly asked if we still used her lamp. But it's gone. >> Gone? Christina, >> I traded it to him for a mounted duck. >> Where is the lamp right now? >> On a shelf in Simon's antique shop. >> Okay, come on. Let's go. >> But dad. But Dad, it took me all day to trade it away. And it'll take me all day to trade it back. I'll have to give the skateboard back to Philip and the train to Alice and the rocking chair to Mrs. Fry, and the pumpkins to the farmer, and the duck to Mr. diamonds, the lamp to you, and then I won't even have a skateboard anymore. >> No, no, no. I've got a better idea. Now, I know the antique shopman loves to trade and exchange and swap, but there's one thing he's always willing to trade things for. Mounted duck or no mounted duck. Money. >> Money. >> Mhm. It's so much easier. Come on, let's go. Why do people trade? because they both expect to benefit from the exchange. Direct exchange can sometimes be very inconvenient. Christina wanted a skateboard. Philip, who had a skateboard, wanted a train. Remember all the trouble Christina had getting a train to trade with Philillip? Using money is the most convenient way to trade. Money can be exchanged for almost anything. General acceptability is what gives money its value in exchange. Throughout history, a wide variety of things have been used as money. But today, money takes two main forms. currency, that is coins and bills, and checks, which are pieces of paper ordering a bank to make a payment from a customer's account. Currency and checks are used as money because they are convenient and generally acceptable. Thanks, Mr. Simons. Come on, Christina. Let's go. >> Can I stay a while and look around some more, Dad? >> Well, um, if it's all right with Mr. Simons, >> certainly. >> Okay, we'll see you at home, honey. >> Mr. Simons? >> Yes. Were you able to find something? >> I think so. How would you like to trade this silver tray for the binoculars? >> Well, I have several silver trays, but I don't have any binoculars. May I see them? >> Sure. >> Thank you. >> They're a little used. Well, they look in good shape. >> All right, it's a deal. >> Great. It's nice doing business with you. >> Thanks for coming in. >> Oh, well, >> well, if it isn't my favorite sea captain. How are you, Bill? >> Fine. Just nice pair of binoculars you got there. Mind a bit of a look? >> No, not at all. >> All right, Al, I'm out. >> Are you feeling rich this morning? >> Nope. >> How's $20 sound? to be you. >> Thanks, Al. Pleasure doing business with you as always. >> Good. Hope to see you again now. >> Great. >> Bye. >> Hello. >> Hello. You had a genuine apple over here this morning, didn't you? >> I'm sorry it's gone, but we do have a lovely Whitby. Would you care to have a look at it? >> Yes, I would. >> It's just over there on that table. >> I love these old tall brass lamps. >> It's beautiful. How much? >> $35. >> May I write your check? >> Certainly. Do you have identification? >> Yes, I do. >> Would you take it to the table, please? Oh yes, that seems in order. >> Thank you. >> Thank you. >> And here's your whitby. I'm sure you'll enjoy it. >> Thank you. It's a pleasure doing business with you. >> Come and see us again. Goodbye. >> How much is this spinning wheel, please? >> $75, ma'am. Marked down from 100. >> I'll take it. >> It's beautiful, isn't it? >> Do you take credit cards? >> I'd rather not, if you don't mind. >> May I write you a check? >> Do you have identification? >> Dear me, no, I don't think I do. I guess I'll have to pay you cash. Well, that's perfectly acceptable. >> Thank you. May I give you a hand with this? >> Oh, thank you. >> Nice doing business with you. >> Hi, Christina. >> Mr. Simons, when I grow up, I'm going to have a shop, too. I like the way everybody likes you. They all say it's nice doing business with you. >> That's nice of you to say that. >> Just one thing, though. >> How come you always take cash, but sometimes you don't take checks? >> Well, the main reason is cash is simpler. With cash, I can use it for everything I have to pay for. With checks, first I have to make sure that the person writing the check has a bank deposit. And then if there's a deposit, I can get cash from the bank for the check. >> Does the bank always give you cash for the check if there is a deposit? >> Yes, if I have the proper identification, they can't say no. They have to cash the check when I present it. But if I don't want cash, I can deposit the customer's check in my bank account and then write checks on it myself. For instance, when I have to pay my rent or my telephone bill. >> But isn't a credit card just like a check? >> No. Credit cards are different both for the customer and for me. >> Really? >> When a customer uses a credit card, he's signing for a loan from the credit card company. >> A loan? >> That's right. And he has to repay the credit card company with real money, either by cash or a check drawn on a bank deposit. Charging it only delays the repayment by the customer. And if he doesn't repay the credit card company by a certain date, he has to pay interest. But how are credit cards different from checks for you? >> You really are serious about going into business, aren't you? Come on, let me show you. >> You see this slip, Christina? This is a credit card slip. Now, I can't take this slip to the credit card company and get paid cash immediately like I can when I take a check to the bank. Besides, the credit card company pays me only once a month for the slips that I turn in. And then they charge me a fee, so I can't collect the full amount that's showing honestly. >> Well, I see why you'd rather not take credit cards, but I still think that swaps for the most part. >> So do I. But you know, the butcher doesn't feel that way. He wouldn't like it if I tried to pay for my meat with this propeller. He wants cash, so I have to pay him cash. >> I guess he do. >> Do you get the hang of it now? Do you think you can tell me why money is generally best? >> [music] >> The content of trade-offs was developed entirely with funds from a consortium of 46 state and provincial [music] education agencies. Other funds for tradeoffs were provided by these foundations and corporations. This program was produced by the filmworks for the Ontario Educational Communications Authority. Animated [music] segments produced by Goldshaw and Associates under the supervision of AIT, the agency for instructional television.