Article 4: Christopher Ingraham, Taxpayers Lost $105 Million on Pennies and Nickels Last Year,” Washingtonpost.com, March 10, 2013. Available at

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/03/10/taxpayers-lost-105-million-on-pennies-and-nickels-last-year/

This week’s article focuses on a specific issue related to the U.S. payments system: the cost to taxpayers of producing the various forms of money that circulate in our economy. Pennies and

nickels cost more to produce than they are worth, and they cost more to produce than do other forms of money. Class discussion can be related to:
    Transaction costs (Chapter 2)
    Meaning and functions of money, payments system, and types of money (Chapter 3)
Questions for Discussion
1.    Define the following terms and phrases used in or related to this article:
a.    transaction costs
b.    payments system
c.    commodity money
d.    fiat money
What are the three main functions of money?
.    Define and give an example of each function.
a.    What items do modern societies generally use to perform these functions?
Is the U.S. payments system best characterized as a commodity or a fiat money system? Why?
What two problems does Ingraham see with the use of pennies and nickels in the U.S. payments system?
.    What potential solutions does Ingraham suggest for these problems?
a.    Do you agree with Ingraham’s outlook that Americans may be more willing to adopt these solutions than they have been in the past? Why?
Sample at least four of the comments that are posted for this article. Do you agree or disagree with the points they raise? Do the comments lead you to reconsider the issue and your

answer to Question 4, Part b? Explain.