Children's economic reasoning follows a developmental sequence in which their ideas about money and other basic economic concepts are forming. Even children in the early primary grades can learn some basic economics and retain understanding of economic concepts if they are taught in developmentally appropriate ways. Given how important economic literacy is in today's world, it is essential that students acquire a correct understanding of money from the beginning. The elementary grades are the right time to teach students about the important role of money in exchanges, how the use of money differs from barter, the three key functions of money, and what characteristics money must have in order to function effectively. Educators who teach children in the primary grades about exchange and money in developmentally appropriate ways can expect their students to provide reflective answers to questions that probe for economic reasoning. Activities on barter versus money and testing objects in "The Money Lab" are presented. Handouts on functions and characteristics of money and testing objects in "The Money Lab" are also included. (Contains 1 table and 9 notes.)