LESSON SUMMARY

1. Bartering involves a direct trade/exchange of goods and services. It is the process of trading services or goods between
two parties without using money in the transaction.
2. During ancient times, barter system was a local phenomenon, which involved people in the same locality. Later,
however, it developed to include the other areas around the vicinity and, thereafter, became a system of trade between and
among different places.
3. During the Middle Ages, the Europeans started traveling across the globe and used barter services to trade their goods
like fur and crafts to the East, in exchange for perfumes and silk. The people of colonial America used wheat, skin of male
deer (bucks), and musket balls to do business. They were also experts in exchanging services.
4. The advantage of bartering is that it does not involve money and it is very simple. However, some disadvantages also
exist. It is difficult to find people who need what the other people have. There is no standard measure of value. It is time-
consuming.
5. Trade and barter were precursors to the monetary system used in today's society. Although trade and barter may seem
almost archaic, they were the business solutions for people who lived before the convenience of money and the credit
card.
6. The invention of money did not put an end to bartering services. Monetary crises fueled the revival of this system and
the current recession has once again set a stage for its comeback. There are now swap markets and online auctions. There
are numerous websites that offer online bartering arrangements.
7. The early humans had very little needs. They used leaves and animal skin as clothes and ate vegetables, fruits, fish, and
animal meat. There was no need for exchange of goods, as their needs were limited.
8. As the number of people increased, the early humans had to travel long distances to find food and started forming
groups. The members of each group stayed together while traveling and hunting, refraining from any interaction with
other groups.
9. Gradually, however, intergroup interaction started and this paved the way for a system of trading, where groups started
exchanging their goods for what they needed, which the other groups had.
10. After years of nomadic life (migratory, mobile, wandering), people started settling down in areas, where they began
growing plants and raising farm animals. As cultivation and farming flourished, people then had enough time to spend on
other work, like pottery, carpentry, weaving, and the like. They started trading surplus goods and the system of trade
flourished.
11. The history of bartering can be traced back to 6000 BC. The barter system was introduced by the tribes of
Mesopotamia, then adopted by the Phoenicians who bartered their goods to people in other cities located across the
oceans. An improved system of bartering was developed in Babylonia, too.
12. People used to exchange their goods for weapons, tea, spices, and food items. Sometimes, even human skulls were
used for barter. Another popular item used for exchange was salt. Salt was so valuable at that time that the salary of
Roman soldiers was paid in salt.
LESSON SUMMARY
1. It is believed that the first recognizable metal coins appeared in China, during 1000 BC. The earliest currency of China
of the eighth century BC consisted of miniature hoes and billhooks (pruning implements), with inscriptions indicating the
authority.
2. Sometime around 770 BC, miniature replicas of tools and weapons cast in bronze were used by the Chinese as a
medium of exchange. The small bronze celts (prehistoric tools resembling chisels) and bronze rings played a monetary
role. Due to impracticality, these tiny daggers, spades, and hoes were eventually abandoned for objects in the shape of a
circle. These objects became some of the first coins.
3. Around 700 BC, the Chinese moved from coins to paper money. By the time Marco Polo (the Venetian merchant,
explorer, and writer) visited China in approximately AD 1271, the emperor of China had a good handle on both the money
supply and various denominations.
4. The first region of the world to use an industrial facility to manufacture coins (a mint) was in Europe, in the region
called Lydia (now western Turkey).
Minting is the process of making a coin by stamping metal. In 600 BC, around the time China started using paper money,
Lydia's King Alyattes minted the first oficial currency, non-standardized coins from electrum (a naturally occurring alloy
of gold and silver) that did not have a standardized value
5. King Croesus (son of King Alyattes) of Lydia (reigned 560-546 BC) produced a bimetallic system of pure gold and
pure silver coins. The Croeseld, anciently Kroiseloi stateres, was a type of coin, either in gold or silver, which was minted
in Sardis by King Croesus, from around 550 BC, Croesus is credited with issuing the first true gold coins with a
standardized purity for general circulation, and the world's first bimetallic monetary system.
6. The foundation deposit of the Artemisium (temple to Artemis) at Ephesus shows that electrum (which the Greeks called
"white gold") coins were in production even before Croesus, possibly under King Gyges.
7. The European colonial governments in North America issued the first paper currency in Canada (then a French colony).
Instead of going back to a barter system, the colonial governments issued IOUS (promissory notes) that traded as a
currency.
8. According to Adam Shortt, the great Canadian economic historian, the first regular system of exchange in Canada
involving Europeans occurred in Tadaoussac in the early seventeenth century, where French traders bartered each year
with the Mantagnais people (also known as the Innu) trading weapons, cloth, food, silver items, and tobacco for animal
pelts, especially those of the beaver.
9. The first colonial settlement at Quebec on the St. Lawrence River was established by Samuel de Champlain in 1608.
The beaver pelt was the one universally accepted medium of exchange in the infant colony, although wheat and moose
skins were also employed as legal tender. As the colony expanded and its economic and financial needs became more
complex, coins from France came to be widely used.
10. Silver and copper coins designed especially for the colonies was minted in 1670. These coins could not be circulated
in France. While apparently intended only for the West Indies, a small number of these coins are believed to have
circulated in Canada.
11. The West Indies are a chain of islands in the Caribbean Sea and Atlantic Ocean divided into three groups: The
Bahamas, the Greater Antilles, and the Lesser Antilles.
12. During the mid-1600s, Spanish dollars (piastres) began to circulate in the French colonies These over-stamped
Spanish dollars represent the first distinctive Canadian coins.
13. The livre (French for "pound" and the name of both units of account and coins) was the currency of the Kingdom of
France and its predecessor state of West Francia from 1781 to 1794.
14. In 1885, Jacques de Meulles, Intendant of Justice, Police, and Finance came
up with the temporary issuance of paper money printed on playing cards. Card
money served as money in Canada, just as coin did in France.
15. In 1717, all debts and contract in Canada became payable in monnoye de France.
16. Copper coins were introduced in 1722, but they were not well received by merchants. Notes issued by private
individuals based on their own credit standing also circulated as money. The government issued promissory notes called
ordonnances and treasury notes called acquits, which began to circulate as money.
17. In March 1729, card money was legal tender for all payments and replaced the ordonnances in circulation. Legal
tender means currency, such as coin and paper money, is valid and sufficient for the payment of debts. A rapid increase in
the amount of paper in circulation during the late 1750s led to rapid Inflation. Inflation means increase in prices, reducing
the purchasing power of money.
18. On October 15, 1759, the French government suspended payment of bills of exchange drawn on the Treasury for
payments of expenses in Canada until three months after peace was restored. Paper money traded at a sharp discount and
ultimately became worthless following the British conquest in 1760. Gold and silver, which had been hoarded, came back
into circulation.
19. Settlement of the paper obligations issued by the colonial authorities in Canada was included in the Treaty of Paris,
signed in February 1763, which ended the war between Great Britain and France.
20. The advent of paper money led to an increase in international trade. Today, physical currency is not required, as
electronic money is widely used for monetary transactions. In fact, we now have digital/virtual currencies or
cryptocurrencies.
KEY TAKEAWAYS
1. The first recognizable metal coins appeared in China, during 1000 BC.
2. Sometime around 770 BC, the small bronze celts (prehistoric tools resembling chisels) and bronze rings played a
monetary role.
3. Objects in the shape of a circle became some of the first coins.
4. Around 700 BC, the Chinese moved from coins to paper money.
. The first mint, an industrial facility to manufacture coiris, was established in Lydia (now western Turkey).
6. Minting is the process of making a coin by stamping metal.
7. In 600 BC, around the time China started using paper money, Lydia's King Alyattes minted the first official currency,
non-standardized coins from electrum (a naturally occurring alloy of gold and silver).
8. King Croesus (son of King Alyattes) of Lydia is credited with installing the world's first bimetallic monetary system of
pure gold and pure silver coins, the Croeseid (anciently Kroiseioi stateres), around 550 BC.
9. The foundation deposit of the Artemisium (temple to Artemis) at Ephesus shows that electrum (which the Greeks called
"white gold") coins were in production even before Croesus, possibly under King Gyges.
10. The European colonial governments in North America issued the first paper currency in Canada (then a French
colony). Instead of going back to a barter system, the colonial governments issued IOUs (promissory notes) that traded as
a currency.
11. The first regular system of exchange in Canada involving Europeans occurred in Tadaoussac in the early seventeenth
century, where French traders bartered each year with the Mantagnais people (also known as the Innu) trading weapons,
cloth, food, silver items, and tobacco for animal pelts, especially those of the beaver.
12. The first colonial settlement at Quebec was established by Samuel de Champlain in 1608.
13. The beaver pelt was the one universally accepted medium of exchange in Quebec, although wheat and moose skins
were also employed as legal tender. As the colony expanded and its economic and financial needs became more complex,
coins from France came to be widely used.
14. Silver and copper coins, apparently intended only for the West Indies, was minted in 1670, believed to have circulated
in Canada, but could not be circulated in France.
15. The West Indies are a chain of islands in the Caribbean Sea and Atlantic Ocean divided into three groups: The
Bahamas, the Greater Antilles, and the Lesser Antilles.
16. During the mid-1600s, Spanish dollars (piastres) represent the first distinctive Canadian coins.
17. The livre (French for "pound") was the currency of the Kingdom of France and its predecessor state of West Francia
from 1781 to 1794.
18. In 1885, Jacques de Meulles, Intendant of Justice, Police, and Finance came up with the card money, which served as
money in Canada, just as coin did in France, but it was only in March 1729 that card money became legal tender and
replaced the ordonnances in circulation.
19. Legal tender means currency, such as coin and paper money, is valid and sufficient for the payment of debts.
20. Inflation means increase in prices, reducing the purchasing power of money.
21. In 1717, all debts and contract in Canada became payable in monnoye de France.
22. Copper coins were introduced in 1722, but they were not well received by merchants. Notes issued by private
individuals also circulated as money.
23. The government issued promissory notes called ordonnances (replaced later by card money) and treasury notes called
acquits, which began to circulate as money.
24. Bills of exchange drawn on the Treasury were used for payments of expenses in Canada.
25. Settlement of the paper obligations issued by the colonial authorities in Canada was included in the Treaty of Paris,
signed in February 1763, which ended the war between Great Britain and France.
26. The advent of paper money led to an increase in international trade.

LESSON SUMMARY
1. Barter was the means of trade long before the Spaniards came to the Philippines. However, the inconvenience of the
barter system led to the adoption of a specific medium of exchange the cowries, glossy, often colorfully patterned shells.
Cowries produced in gold, jade, quartz, and wood became the most common and acceptable form of money through many
centuries.
2. Barter rings made in gold were the first local form of coinage called piloncitos. These had a flat base that bore an
embossed inscription of the letters "MA" or "M," believed to be the name by which the Philippines was known to Chinese
traders during the pre-Spanish time.
3. The Spaniards ruled the Philippines from 1521-1897 (over 300 years). The cobs or macuquinas (silver coins) of
colonial mints were the earliest coins brought in by the galleons from Mexico and other Spanish colonies. These silver
coins usually bore a cross on one side and the Spanish royal coat-of-arms on the other.
4. The barrilla, a crude bronze or copper coin worth about one centavo, was the first coin struck in the country as ordered
by the Royalty of Spain. The Filipino term "barya," referring to small change, had its origin in barrilla.
5. Gold coins with the portrait of Queen Isabela were minted in Manila. Silver pesos with the profile of young Alfonso
XIII were the last coins minted in Spain. The pesos fuertes, issued by the country's first bank, the El Banco Español
Filipino de Isabel II, were the first paper money circulated in the country.
6. The Philippine Republic of 1898 under General Emilio Aguinaldo issued its own coins and paper currency backed by
the country's natural resources. At the Malolos arsenal, two types of two-centavo copper coins were struck. One-peso and
five-peso revolutionary notes printed as Republika Filipina Papel Moneda de Un Peso and Cinco Pesos were freely
circulated.
7. With the coming of the Americans in 1898, modern banking, currency and credit
systems were instituted making the Philippines one of the most prosperous
countries in East Asia. The Americans instituted a monetary system for the
Philippine based on gold (gold standard) and pegged the Philippine peso to
the American dollar at the ratio of 2:1, two pesos = one US dollar. The gold
standard is a monetary system where a country's currency or paper money
has a value directly linked to gold; countries agreed

LESSON SUMMARY
1. Mobile payments are money rendered for a product or service through a portable electronic device, such as a cell
phone, smartphone, or a tablet device. It can also be used to send money to friends or family members.
2. Near field communication (NFC) payments is the technology that allows two devices-your phone and a payment's
terminal-to process contactless payments using close-proximity radio frequency identification.
3. Sound wave-based (SWB) or sound signal-based (SSB) mobile payments or pay-by-sound uses an advanced, ultra-low
power, wireless transmission technology to transmit data via sound waves that originate from POS terminals. Any phone
with a microphone can pick up those waves to complete a transaction without the need for internet.
4. Magnetic secure transmission (MST) is when a phone emits a magnetic signal imitating the magnetic strip on the
payer's credit card, which the card terminal picks up and processes as if a physical card was swiped through the machine.
MST is secure as it uses a secure tokenization system.
LESSON SUMMARY
1. Cryptocurrency or virtual/digital currency is any type of digital unit that is used as a medium of exchange or a form of
digitally stored value generated by agreement within the community of virtual currency users. It is referred to as "digital
gold." It is also called "altcoins." Cryptocurrency is digital money-it is virtual and has no physical form.
2. Fiat currency or cash, on the other hand, is the real currency. Coins and paper money (bills) issued and printed by the
central bank of a country are fiat currency, fully-backed by the government of a country and is acceptable as payment for
public and private debts.
3. E-money is a digital representation of fiat currency stored in digital wallets or e-wallets. Any amount of currency stored
in an electronic wallet (such as GCash, PayMaya, Coins PH, GrabPay, and the like) is e-money, which can also be
accepted as a "card payment or can be withdrawn right away as cash.
4. Virtual currency, which is stored digitally, would still need to be converted first to Philippine peso, then transferred to a
destination wallet or be withdrawn as cash through different mediums that are accepted in the country. In general,
conversion is done through a virtual currency exchange. In the Philippines, cryptocurrencies are regulated by the Bangko
Sentral ng Pilipinas (BSP).
5. Cryptocurrencies work through blockchain technology. Blockchain is a special kind of database, a "distributed ledger"
or a "global ledger" built on a data structure known as "
LESSON SUMMARY
1. The "Commercial Revolution" brought a revolutionary change in the economy of Europe: the transition from local
economies to national economies, from feudalism to capitalism, and from a rudimentary trade to a globally larger
international trade.
2. This commercial revolution gave birth to mercantilism. According to the mercantilists, it is the goal of the economy
politics to ensure that the state is enriched by increasing the entry of gold and silver and stocking the country with the
same through creating the highest possible export/trade surplus because exports bring an inflow of gold, whereas imports
lead to the outflow of gold. This is the reason mercantilism was also known as "bullionism."
3. Mercantilism believes that the state should actively intervene in the economy. Countries employed a policy of
protectionism-protecting the export industries that bring in the gold and silver through customs tariffs, quotas, and the like
to curtail imports.
4. The period also marked the rise of new nation-states, whose rulers were able to amass more gold and wealth for their
countries by increasing exports and trade.
These nation-states expanded their wealth by using their colonies around the world in an effort to control more trade and
amass more riches. Mercantilism aimed to encourage production within the national territories

LESSON SUMMARY
1. David Ricardo's theory of comparative advantage posits that countries export the goods they have abundant production
factors for, while they import the goods for which they have scarce production factors. Relative intensities of production
factors (land, labor, and capital) determine the comparative advantage of a country.
2. Using the above premise as a starting point, two Swedish economists, Eli Heckscher and his student Bertil Ohlin, from
Stockholm School of Economics, in the 1920s, studied how a country could gain comparative advantage by producing
products that utilized factors that were in abundance in the country.
3. The Heckscher-Ohlin theory or H-O theory is based on a country's production factors-land, labor, and capital; hence,
the theory is also called the factor proportions theory or the resources and trade theory. Hecksher and Ohlin determined
that the cost of any factor or resource was a function of supply and demand. Many elaborations of the model were
provided by Paul Samuelson after the 1030g and thus sometimes the model is referred to as the Heckscher-Ohlin-