• Unit 1: Introduction to Monetary History

    This unit introduces the human interaction with money and lays the groundwork for a layered money system. It examines the transition from precious metal to precious metal coins and the pros and cons of a coinage system. It claims that the florin, a gold coin minted by the Republic of Florence in 1252, was the foundation of a pan-European monetary system. A system of banking networks, double-entry accounting, and credit instruments developed as the basis of the modern financial system. This unit attempts to explain why a layered money system is important for understanding global commerce and how one evolved before the era of central banking.

    Completing this unit should take you approximately 2 hours.

    • Upon successful completion of this unit, you will be able to:

      • examine benefits from and risks to a precious metal coin-based monetary system;
      • identify some ancient coins and their key characteristics;
      • explain the advantages and disadvantages of bimetallism; and
      • compare final settlement and deferred settlement.

      • 1.1: The First Coins

        This subunit summarizes how humans arrived at precious metal coins as a universally recognized money form by discussing early coins and the role of government in the issuance of currency. This subunit claims that a coinage system has significant pros and cons and defines important monetary concepts such as denomination and fungibility.

      • 1.2: The Florin

        This subunit explains the significance of the gold florin coin in the context of monetary history. It looks at how the florin laid the foundation for a banking network to emerge and trace the beginning ideas of a world reserve currency. It makes claims about the major disadvantages to the monetary system before the 16th century, including coin multiplicity, physical transfer, and money velocity as an economic force.

        • The Florin Page

          Read this page about the pros and cons of bimetallism and the differences between final and deferred settlements.

      • 1.3 Supplemental Information

        • Gold: The Story of Man's 6000 Year Obsession Page

          Watch this video for additional information on gold’s role throughout the history of humanity. We will see why gold became money and trace its path through the rise and fall of empires and civilizations.

      • Unit 1 Review and Assessment

        • Unit 1 Review Page

          This video walks through the major topics we covered in Unit 1. As you watch, consider the benefits and risks of a precious metal coin-based monetary system.

        • Unit 1 Assessment Quiz
          Receive a grade

          Take this assessment to see how well you understood this unit.

          • This assessment does not count towards your grade. It is just for practice!
          • You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
          • You can take this assessment as many times as you want, whenever you want.