The climate and soil of Greece are not very good for growing things, and as the population of Greece began to grow in the Bronze Age, there soon got to be more people than the Greeks could easily feed with farming and sheep-herding and hunting and gathering. But Greece had great seaports, so Greek people relied more and more on sailing and the activities that went with sailing: fishing, fighting, piracy, and trading.
During the political collapse of the Greek Dark Ages (about 1200-1000 BC), many Greek people did not have children, or left for other countries, and there weren’t so many people living in Greece anymore. Because all the countries around them were also poorer, everybody did less trading. There wasn’t anyone to buy Greek wool cloth, so Greek people began to raise cattle instead of sheep.
After the Dark Ages, trading started up again, and people went back to raising sheep rather than cattle, and they began to make wool cloth, and to trade and fight again.
Because they were mercenary soldiers, by the Archaic period Greek men learned about minting coins from the Lydians they fought for in West Asia, and soon each Greek city-state was minting its own coins. Greek traders began to use these coins as they traded with the Etruscans, the Phoenicians, and the Egyptians. As the Mediterranean region recovered from the Dark Ages, the Greeks and the Phoenicians sent out many groups of settlers to colonize (conquer and take over) southern Italy, southern France, Spain, and North Africa.
Greek traders sold wine, pottery, glass beads, spices, linen, iron knives, and perfume to North Africa and Europe, and they bought wood, slaves, ivory, tin, salt, furs, and dogs. Greeks traded to the east, too: they sold the tin and salt and slaves, obsidian, wine and pottery to the Lydians and Phoenicians and Egyptians, and bought glass beads, medicine, spices, silk and papyrus from those people. Further north, around the edges of the Black Sea in Central Asia, Greek traders bought wheat and barley, cattle and horses, wood and slaves from the Scythians, and sold them pottery, wine, iron and bronze tools, and linen.
Learn by doing: on a map of the Mediterranean and Black Sea, show what is being traded and where
More about the Classical Greek economy
Trade & Warfare, by Robert Hull (2000).
The Ancient Economy by Walter Scheidel, Sitta Von Reden (2002). A collection of essays by different specialists, but written for the non-specialist.
Economy and Society in Ancient Greece, by Moses Finley (revised edition 1983).
The Dark Age of Greece: An Archeological Survey of the Eleventh to the Eighth Centuries B.C., by Anthony Snodgrass (2000). Snodgrass thinks that an increase in population caused most of the changes of the Archaic period.
Warriors into Traders: The Power of the Market in Early Greece, by David W. Tandy (2001). More controversial; Tandy argues that Greek colonies were founded by traders, not because there were too many people living in Greece.
The Greeks Overseas: The Early Colonies and Trade, by John Boardman (2nd edition 1999).