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Virginia Studies: Study Guide 10
Everything You Will Need to Know About…
Colonial Economics
Directions: Please answer using complete sentences where possible.
Paragraph 1
1. What kinds of hardships did the colonists face in the new world?
The settlers faced harsh winters and their lack of survival skills.
Many of them were also poor because they spend most of their
money to travel to the New World.
2. What does the author mean by “New World?”
The people called it the New World because it had not been fully
explored by their people.
3. Why was money not used by the colonists?
Money was not used because England would not allow the colonies
to print their own bills or make coins, so very few colonists had
money.
4. What did the colonists use in place of money?
The colonists bartered instead of using money.
5. What is bartering?
Bartering is trading goods and services without the use of money.
6. Who did the colonists trade with?
The colonists traded with England, the Indians, and with their
neighbors.
7. Did the colonists seem to have a good relationship with the Indians?
If the colonists and the Indians were trading with each other,
than they most likely had a good relationship during this time.
Paragraph 2
8. What were some of the different forms of exchange, or money, used
during the colonial period?
Some of the forms of exchange during the colonial period were
rice, corn, animal skins, gunpowder, and livestock.
9. Why would the colonists trade for gunpowder? animal skins?
livestock?
The colonists traded for these things because they needed them
and did not have them.
10. What are some things you might trade for?
Answers will vary.
Paragraph 3
11. What was a popular form of exchange in the colony of Virginia?
A very popular form of exchange in the colony of Virginia was
tobacco.
12. How did tobacco farmers pay for the goods and services their families
needed?
Tobacco farmers used their tobacco to pay for goods and services
their families needed.
13. What is credit?
Credit is buying a good or service now and paying for it later.
14. What is a debt?
Debt is when you owe someone a good or service.
15. When did the farmers pay their debt?
Farmers paid their debts when their crops were harvested and
sold.
16. What’s the difference between credit and debt?
Credit is when someone gives you something now and expects for
you to pay for it later, while debt is when you actually owe that
person something and can’t pay it.
Paragraph 4
17. Why were banks not necessary in colonial Virginia?
Banks were not necessary in colonial Virginia because there was
very little paper money or coins being used.
18. How did not having a need for banks “hurt” the colonists?
The colonists were not able to save money very easily.
19. What does it mean to save?
To save means you are putting money away to spend at a later
time.
VOCABULARY
Define each of the following words or phrases:
Vocabulary Word
Medium of exchange
Definition
something you can trade to get
something you need or want; money
is one example
a community with lots of farming
Agricultural society
Barter
trading or exchanging of goods and
services without the use of money
Consumers
people using (buying or trading)
goods and services
Credit
buying a good or service now and
paying for it later
Debt
Saving
a good or service owed to another
to put money away to save or to
spend at a later time