Incomplete
Draft of Content and Pedagogy Materials
by grade level, in reverse order (High School first, Kindergarten last)
Social Studies--Grade-Level Expectations
Economics (Core Course: Free Enterprise)
High School
Economics
Fundamental
Economic Concepts
1. Apply fundamental economic concepts to decisions about personal finance (E-1AH1)
http://www.ncee.net/ea/program.php?pid=8
http://fffl.ncee.net/related_lessons.php
2. Define scarcity (E-1A-H1)
http://www.nicholls.edu/mcoats/HS2_SCARCITY.htm
http://ingrimayne.saintjoe.edu/econ/Introduction/Defintns.html
http://ingrimayne.saintjoe.edu/econ/Introduction/ScarcityNChoice.html
http://fte.org/teachers/lessons/efl/efllesson1.htm
http://fte.org/online/teachers/sample/1lesson1/eoft1Lesson1.htm
http://fte.org/teachers/lessons/efl/efllesson6.htm
3. Identify factors that drive economic decisions (e.g., incentives, benefits, costs, trade
offs, consequences) (E-1A-H1)
http://fte.org/teachers/lessons/efl/efllesson2.htm
http://fte.org/teachers/lessons/efl/efllesson6.htm
Need to discuss institutions (such as
contracts and property rights), the environment for decision making and
interaction in markets—see #17 below.
4. Analyze an economic choice at the personal, family, or societal level to determine its
opportunity cost (E-1A-H1)
http://www.nicholls.edu/mcoats/hs4_Opportunity_cost.htm
5. Explain how the scarcity of natural resources leads to economic interdependence
(E-1A-H1)
http://www.nicholls.edu/mcoats/hs5_Natural_Resource_Scarcity_Interdependence.htm
6. Identify the four basic economic questions (E-1A-H1)
Every society (every economy) must have a way to provide answers to four basic questions:
MORE
a) There are
four basic questions that economists ask about any economy.
There are four basic questions that every economy must answer.
There are three kinds of economies: A traditional economy, command economy and a market economy. What separates these economy types is the answer or answers to a fifth question:
In a traditional economy, traditions answer these questions. A person follows in the footsteps of their parents. Still, most roles or jobs are not usually highly specialized. Some of the questions might be answered by a chief or other tribal leader, such as the question of who gets what.
In a command economy, the government would answer all these questions. The political process in command economies is often dictatorial, but it could be democratic.
In a market economy, the marketplace decides how to answer the four basic questions. A market economy would answer these questions by saying that each producer can answer these questions themselves. A producer can make their own decisions, but these decisions would be determined or shaped by the marketplace, by what his competitors are doing and by what consumers seem to want. In other words, a producer makes decisions that will make his product sell, and make him money. The method chosen for production of a particular good will largely be the least costly way to make the good, which amounts to the most profitable way to produce it. The buying public really makes these decisions, by choosing to buy, or not to buy, a product from one producer or another. The consumer ends up making these decisions. This is called “consumer sovereignty.”
Here in the United States, we live in a market economy.
http://www.abc.net.au/money/currency/features/feat2.htm
http://www1.umn.edu/humanrts/edumat/sustecon/others/islandgame.htm
http://ingrimayne.saintjoe.edu/econ/AllocatingRationing/Overview6.html
7. Define productivity and characterize the relationship between productivity and standard of
living (E-1A-H2)
Productivity is often defined as the output per hour of work. Since we can only work so many hours (physical limits and willingness limits of workers), the more each of us can produce in an hour will mean more we can all produce in an hour, in a week and in a year. The more we can produce in a year, as a society, or as a country, the more we can consume. Higher rates of productivity mean higher possible levels of consumption. While we could consume more than we produce, to do so would mean that we were consuming part of our wealth, whether manmade wealth we call capital, or natural wealth we call natural resources.
http://fte.org/teachers/lessons/efl/efllesson7.htm
8. Explain the role of marketing and channels of distribution in economic decisions
(E-1 A-H2)
9. Identify actions or conditions that increase productivity or output of the economy
(E-1A-H2)
Productivity can be increased by three basic ways:
1) We could increase productivity if we provide workers with more tools and equipment to work with. Tools and equipment are called capital. Capital is defined as resources that help make other goods or services without becoming physically a part of the good being made—capital increases productivity. Capital is a resource that lasts and can be used over and over. Purchases of capital involve an investment or sunk cost, and as such, involve risk.
Capital is often referred to as a “roundabout means of production.” Instead of making something directly, just with our hands, we first make the tools or
capital and then are better able to make whatever it is we are interested in making for consumption. The production of capital entails opportunity costs;
because we cannot be producing the final consumption goods we are interested in consuming if we are busy producing the equipment or capital.
To produce capital, then, people will have to save, or consume less than they produce. If people consume everything they produce, they cannot be
producing capital. To get people to save and invest in capital, then, people must be given a return to get them to forgo current consumption. People will
not voluntarily invest in capital if they think that they will not get a return on their investment.
Psychologists discuss the problem of “delayed gratification.” A reward delayed does not provide quite the incentive that an immediate reward of the same
amount does. To save and invest in capital, people must receive a return sufficient to overcome this “delayed gratification” problem. They also must be
given a return to overcome the risk involved in the sunk costs of an investment. Higher returns to capital owners provide them with incentives to produce
the capital and risk the investment and wait for payment. Heavy taxes on the return to capital equipment reduce the incentive to invest and heavy taxes
on owning capital (through local property taxes) raise the cost of capital without increasing the return, reducing the incentive to invest, leaving workers with
less machinery than they might otherwise have, and reducing their productivity.
Capital is some labor saving device or tool. While it may reduce the number of workers required to produce the same amount of output, it increases the
amount of output per worker. Any worker who is relieved of their work due to some labor saving machinery is available for work doing something else in
the economy. Recall that scarcity means we never have enough. We have always found other jobs for those replaced by labor-saving machinery, because of scarcity—there is always something else that we can do because people as consumers have wants without end.
Investment in capital is essential to productivity growth (and growth in income or the standard of living). Not only is private capital important, but so is
investment in public capital, whether it is in roads, ports, airports, or police, security and defense equipment. Another essential part of public capital is a
legal and court system to help us make and enforce contracts. Still another ingredient of public or social capital is some level of trust among parties to
contracts.
2) The second means to increasing productivity is a variation of the previous means. Economists call it investing in “human capital.” The idea of human capital is that people make investments in themselves when they acquire useful skills that enhance their productivity. To acquire those skills, they have to take time away from producing goods directly and using that time to acquire skills and abilities. Acquiring human capital is what people in school and in special training programs, or even with on-the-job training and experience. People will sometimes take lower paying jobs to learn things to become more employable later. Education is certainly one of the most important components of human capital investment.
Productivity is also enhanced by providing people with a bigger incentive to produce through reductions in the rate of taxation on income. This gives
people a greater incentive to invest in human capital.
3) The third way of increasing productivity is by developing new techniques of production, new technology. We can think of technology as recipes for making things. If we find develop a recipe for making something that reduces our overall use of resources, particularly human resources or labor, we increase what the average worker can produce. Technology development also requires an investment and is very risky. You can’t always have success in finding new ways to do things. While the technology is being developed those resources are not producing anything directly.
http://fte.org/teachers/lessons/efl/efllesson7.htm
10. Explain the skills, knowledge, talents, personal characteristics, and efforts likely to
enhance prospects of success in finding a job in a particular field (E-1A-H3)
Obviously, in each field there are skills required specifically for that particular type of job.
MORE
11. Explain the types of jobs important to meeting the needs of Louisiana industries and
an information-based society (E-1A-H3)
12. Evaluate various careers in terms of availability, educational and skill requirements,
salary and benefits, and intrinsic sources of job satisfaction (E-1A-H3)
13. Compare contemporary and historic economic systems (e.g., ownership and control
of production and distribution, determination of wages) (E-1 A-H4)
http://store.yahoo.com/ncee/focecsys.html
14. Explain the advantages and disadvantages of given market structures (E-1A-H5)
http://fte.org/teachers/lessons/efl/efllesson3.htm
15. Explain factors affecting levels of competition in a market (e.g., number of buyers and
sellers, profit motive, collusion among buyers or sellers, presence of cartels) (E1A-H5)
http://fte.org/teachers/lessons/efl/efllesson3.htm
16. Explain the effects of competition on producers and consumers (E-1A-H5)
http://fte.org/teachers/lessons/efl/efllesson3.htm
17. Analyze the role of various economic institutions in economic systems (E-1A-H6)
Money
Banks
Contracts
Property Rights
http://store.ncee.net/ncee/institutions.html
18. Explain the role of government as producer, employer, and consumer in economic
systems (E-1 A-H6)
http://www.abc.net.au/money/currency/features/feat2.htm
19. Analyze the importance of labor-management relations and the effects of given labor
and management practices on productivity or business profitability (E-1A-H6)
20. Compare and contrast characteristics of various forms of business ownership (E-1A
H6)
21. Explain ways in which businesses have changed to meet rising production costs or
to compete more effectively in a global market (E-1A-H6)
22. Analyze the role of banks in economic systems (e.g., increasing the money supply by
making loans) (E-1A-H7)
http://ingrimayne.saintjoe.edu/econ/Banking/Overview10ma.html
http://ingrimayne.saintjoe.edu/econ/Banking/Commodity.html
http://ingrimayne.saintjoe.edu/econ/Banking/Commodity2.html
http://ingrimayne.saintjoe.edu/econ/Banking/Checking.html
http://ingrimayne.saintjoe.edu/econ/Banking/FedMonPol.html
http://ingrimayne.saintjoe.edu/econ/Banking/MonBalSheet.html
http://ingrimayne.saintjoe.edu/econ/Banking/exploring_monetary_policy.htm
23. Describe the functions and purposes of the financial markets (E-1A-H7)
24. Compare and contrast credit, savings, and investment services available to the consumer from financial institutions (E-1A-H7)
25. Apply an economic concept to analyze or evaluate a given historical economic issue or situation (e.g., causes of the Great Depression, how the New Deal changed the role of the federal government) (E-1 A-H8)
Valley Forge
Diocletian
Friedman’s Great Depression tape
http://ingrimayne.saintjoe.edu/econ/EconomicCatastrophe/OverviewA6.html
http://ingrimayne.saintjoe.edu/econ/EconomicCatastrophe/HyperInflation.html
http://ingrimayne.saintjoe.edu/econ/EconomicCatastrophe/GreatDepression.html
26. Interpret information about a current economic system undergoing change from a largely command or traditional system to a more mixed system (e.g., Eastern European countries, China, other developing economies) (E-1A-H8)
http://store.yahoo.com/ncee/ecintrancomt.html
http://store.yahoo.com/ncee/fromplantoma.html
Individuals, Households, Businesses, and Governments
27. Explain, analyze, and apply principles of supply and demand, including concepts of
price, equilibrium point, incentives, and profit (E-1 B-H1)
After reading the notes answering 28., read this note:
http://www.nicholls.edu/mcoats/note8.htm
Also look here:
http://www.digitaleconomist.com/equilibrium.html
These graphing exercises may also be of help:
http://www.nicholls.edu/mcoats/graph0.htm
An interactive tutorial on shifting supply and demand:
http://www.digitaleconomist.com/market_tutorial.html
http://fte.org/teachers/lessons/efl/efllesson4.htm
One of the best ways to teach students about how supply and demand interact is through the use of a classroom double-oral auction. A double-oral auction is somewhat noisy, but it is a fun way to learn about how incentives, the profits to sellers and the consumer gains, push market prices toward equilibrium. The rules of the market here are very similar to those used at the New York Stock Exchange. Buyers and sellers shout out (well, not too loudly we hope) the prices they will pay or accept, looking for a willing trader on the other side of the market.
The double-oral auction, while an effective teaching device, was used by economists conducting some of the earliest experiments in economics for research use. While much of economic research uses data collected from actual markets, economists are more and more using data from economic experiments set up in a way similar to the double-oral auction.
Materials to include here
1. Teacher instructions—how to set up a double-oral auction experiment/simulation
2. Variations on the double-auction theme
a) price controls
b) collusion of large numbers
c) mergers and competition
3. Auction instructions for students
4. Class-room record sheets for recording transactions in class
5. Student information sheets and record sheets
6. Example data sheets in Excel format
7. Analysis of Supply and Demand and Gains from Trade using experimental data
8. Writing assignment—but let them work in groups
9. A rubric for the writing assignment
28. Identify factors that cause changes in supply or demand for a product (e.g.
complements, substitutes) (E-1 B-H1)
demand and the factors that affect demand
http://www.nicholls.edu/mcoats/note5.htm
supply and the factors that affect supply
http://www.nicholls.edu/mcoats/note7.htm
http://fte.org/teachers/lessons/efl/efllesson4.htm
29. Explain the role of factors of production in the economy (E-1 B-H2)
Economists use the terms “factors of production,” “resources” and “inputs” interchangeably. These are the ingredients used in producing anything we make or grow. Economists classify factors of production into three or four basic categories: land, labor, capital, and some also mention entrepreneurship.
Land is really not just land, but all natural resources. These are all the resources that are provided by nature, those not produced by humans. These are necessary for producing any good, but not necessary for producing certain services.
Labor is any type of human effort (entrepreneurship might be classified as labor because it requires human effort). Management effort, under this classification, is also labor. Labor is any action involving time and effort by human beings.
Capital is discussed at length in #9 above. Tools and equipment are called capital. Capital is defined as resources that help make other goods or services without becoming physically a part of the good being made—capital increases productivity of labor. Capital is a resource that lasts and can be used over and over. Capital is often referred to as a “roundabout means of production.” Instead of making something directly, just with our hands, we first make the tools or capital and then are better able to make whatever it is we are interested in making for consumption. The production of capital entails opportunity costs; because we cannot be producing the final consumption goods we are interested in consuming if we are busy producing the equipment or capital.
One type of capital related to labor is human capital. The idea of human capital is that people make investments in themselves when they acquire useful skills that enhance their productivity. To acquire those skills, they have to take time away from producing goods directly and using that time to acquire skills and abilities. Acquiring human capital is what people in school and in special training programs, or even with on-the-job training and experience. People will sometimes take lower paying jobs to learn things to become more employable later. Education is certainly one of the most important components of human capital investment.
Another important type of capital is public capital. Not only is private capital important, but so is investment in public capital, whether it is in roads, ports, airports, or police, security and defense equipment. Roads and other transportation capital, such as canals, ports and airports, reduce the costs of transporting goods from one place to another. Another essential type of public capital is a legal and court system to help us make and enforce contracts. Still another ingredient of public or social capital is some level of trust among parties to contracts.
Entrepreneurship. Entrepreneurs are people who take the risks of organizing productive resources to make goods and services. Profit is an important incentive that leads entrepreneurs to accept the risks of business failure.
http://fte.org/teachers/lessons/efl/efllesson7.htm
30. Identify factors affecting production/allocation of goods/services and characterize
their effects (E-1 B-H2)
http://ingrimayne.saintjoe.edu/econ/AllocatingRationing/Overview6.html
31. Identify the difference between monetary and non-monetary incentives and how
changes in incentives cause changes in behavior (E-1 B-H2)
Monetary and non-monetary incentives are rewards and/or punishments. If the reward is worth more to someone than the cost they must endure to obtain that reward, then rewarded behavior is increased. Punished behavior gets people to reduce certain behaviors if the punishment is seen as costly enough that the punished behavior is no longer worth pursuing (the gains of that behavior are now less than the costs). Positive incentives (rewards) increase behavior and negative incentives (punishments) reduce that behavior.
One thing we know from psychology is that not all rewards are rewards to all people and not all punishments are punishments to all. The promise of an ice cream cone may be a good reward for good behavior for a small child, but it may not provide much of an incentive to a child with diabetes who knows that sweets can make them sick. Some children do not like to be scolded, and that is a punishment for them, but a few children like the attention, and what is meant to punish, actually for them is a reward and encourages inappropriate behavior. Non-monetary incentives may be rewards for some, but might be punishments for others, or just may not be of any value, positively or negatively, to some.
An important difference between monetary and non-monetary incentives is that monetary incentives are incentives to all. Can you think of someone who treats getting money as a punishment or someone who would increase some behavior in light of an increase in the monetary penalty? The reason money is a “generalized” reward or a reward to all is that we can exchange that money for anything (that is for sell) that we value, and there are so many choices available for monetary exchange, that we are all motivated by money.
32. Analyze the circular flow of goods and services and money payments from a diagram
(E-1 B-H2)
First, let’s differentiate between stock and flow measures.
http://www.nicholls.edu/mcoats/note3.htm
Now let’s look at the circular
flow of money and goods.
http://www.bized.ac.uk/virtual/dc/copper/theory/th11.htm
http://webster.commnet.edu/faculty/~jascot/CH6.htm
Here is an activity.
http://www.education.eku.edu/pt3/clusterk/CircularFlow.html
33. Identify various forms of taxation (E-1 B-H3)
Taxes are always a form of punishment. No matter what was intended, a tax reduces the taxpayer’s net income and provides an incentive not to do the taxed activity.
Taxes can be applied in several ways and to different types of taxpayers. Taxes might be initially paid by businesses or by individuals. Both individuals and corporations are required to pay income taxes. Individuals pay taxes on their income, whether derived from wages and salaries (payments to labor) or business income, rentals, or even from royalties from oil found on you land. The tax code calls all business income “profit” (economists are more specific about the term “profit”). Business income is also subject to taxation.
Taxes on wealth, or “property taxes,” are paid by both businesses and individuals. Business property taxes are usually at a higher rate than residential property taxes, because business property (capital) is assessed or valued at 15% of market value, while residential property is taxes at 10% of market value. The same tax rate or millage is then applied on the assessed value.
Taxes are charged for transactions. There are two basic forms of transactions taxes. One we call a “sales tax.” This tax is usually a particular percentage of expenditures on taxable items and only a few types of goods are exempt. Another is a special levy on certain goods, often items that as a society we try to discourage, such as alcohol and tobacco. These special taxes are usually levied on the amount of the good, rather than the amount spent on the good. A cigarette tax of $0.36 per pack is still 36 cents a pack, no matter if the base price of a pack of cigarettes is $0.50 or $3.00. Usually this tax is part of the price and is not necessarily seen as a separate charge. Taxes on specific items, like cigarettes or beer, are called “excise taxes” and are meant to “punish” or discourage use of these products, which some call sinful. These taxes are sometimes even referred to as “sin taxes.”
Taxes are charged for certain goods bought from outside of the United States. These taxes are termed “import tariffs.” These taxes are sometimes used for revenue, but are usually to discourage imports.
Taxes are sometimes charged on wealth transferred from the deceased to the living, called an estate tax, but also called the “death tax” by opponents of this type of taxation. Notice that this type of taxation encourages people to spend their children’s inheritance, thus reducing capital.
No matter who is initially responsible for paying a tax, note that taxes are also ultimately paid by people, by individuals. Suppose a business pays a tax. The business might be able to charge higher prices to customers, in which case the customer is paying the tax. Whatever tax cannot be passed on to customers reduces the incomes of owners, workers, managers, or suppliers. These are all ultimately people. Businesses, such as corporations, are really just organizations of people and the organization cannot bear a cost, only people can bear a cost.
So we have business taxes and individual taxes, but ultimately, taxes are paid by individuals.
Some taxes are on the flow of income: individual and corporate income taxes. Some taxes are on the stock of wealth: property taxes and estate taxes. Many taxes are also levied on transactions, such as cigarette and beer excise taxes; tariffs which are taxes on imported goods; and general sales taxes.
34. Describe the impact of given forms of taxation (E-1 B-H3)
35. Describe the effects of governmental action or intervention in a market economy
(E-1 B-H3)
http://fte.org/teachers/lessons/efl/efllesson6.htm
36. Describe major revenue and expenditure categories and their respective proportions
of local, state, and federal budgets (E-1 B-H3)
37. Predict how changes in federal spending and taxation would affect budget deficits
and surpluses and the national debt (E-1 B-H3)
38. Evaluate the impact of policies related to the use of resources (e.g., water use
regulations, policies on scarce natural resources) (E-1 B-H3)
39. Explain the causes of global economic interdependence (E-1 B-H4)
http://www.ncee.net/ei/lessons/
40. Describe the worldwide exchange of goods and services in terms of its effect in
increasing global interdependence and global competition (E-1 B-H4)
http://www.ncee.net/ei/lessons/
41. Examine fundamental concepts of currency valuation and foreign exchange and their
role in a global economy (E-1 B-H4)
http://www.abc.net.au/money/currency/features/feat10.htm
42. Explain how the economy of one country can affect the economies of other countries
or the balance of trade among nations (E-1 B-H4)
http://www.ncee.net/ei/lessons/
43. Explain the role of the International Monetary Fund in supporting world economies
(E-1 B-H4)
The IMF website:
44. Identify and evaluate various types of trade barriers among nations (E-1B-H5)
45. Take and defend a position on a trade policy or issue (e.g., NAFTA, G8, European
Union) (E-1 B-H5)
46. Evaluate the role and importance of Louisiana ports and products in the national and
international economy (E-1 B-H6)
The Economy as a Whole
47. Explain the meaning or use of various economic indicators and their implications as
measures of economic well-being (E-1 C-H1)
http://ingrimayne.saintjoe.edu/econ/Measuring/Unemployment.html
http://ingrimayne.saintjoe.edu/econ/Measuring/Unemployment2.html
http://ingrimayne.saintjoe.edu/econ/Measuring/GNP1.html
http://ingrimayne.saintjoe.edu/econ/Measuring/GNP2.html
http://ingrimayne.saintjoe.edu/econ/Measuring/LeadingIndicators.html
48. Define productivity and characterize the relationship between productivity and
standard of living (E-1C-H1)
See number 7 above
49. Interpret various economic indicators used in a chart, table, or news article (E-1C
H1)
50. Draw conclusions about two different economies based on given economic indicators
(E.1 C-H1)
51. Explain how inflation and deflation are reflected in the Consumer Price Index (E-1 C
H2)
http://ingrimayne.saintjoe.edu/econ/Measuring/Inflation1.html
http://ingrimayne.saintjoe.edu/econ/Measuring/Inflation2.html
http://ingrimayne.saintjoe.edu/econ/Measuring/inflation3.htm
52. Explain the impact of inflation/deflation on individuals, nations, and the world,
including its impact on economic decisions (E-1 C-H2)
http://ingrimayne.saintjoe.edu/econ/EconomicCatastrophe/HyperInflation.html
53. Describe the effects of interest rates on businesses and consumers (E-1 C-H2)
54. Predict the consequences of investment decisions made by individuals, businesses,
and government (E-1C-H2)
55. Predict how interest rates will act as an incentive for savers and borrowers (E-1 C
H2)
56. Explain various causes and consequences of unemployment in a market economy
(E-1C-H3)
57. Analyze regional, national, or demographic differences in rates of unemployment (E
1 C-H3)
58. Analyze the relationship between the business cycle and employment (E-1 C-H3)
http://ingrimayne.saintjoe.edu/econ/Cycles/Overview11ma.html
http://ingrimayne.saintjoe.edu/econ/Cycles/BusCycle.html
http://ingrimayne.saintjoe.edu/econ/Cycles/feedback.htm
http://ingrimayne.saintjoe.edu/econ/Cycles/Financing.html
http://ingrimayne.saintjoe.edu/econ/Cycles/InvestSave.html
http://ingrimayne.saintjoe.edu/econ/Cycles/Accelerator.html
http://ingrimayne.saintjoe.edu/econ/Labor/DerivedDemand.html
http://ingrimayne.saintjoe.edu/econ/Connections/Real-Business.html
59. Explain the meaning of underemployment and analyze its causes and consequences
(E-1 C-H3)
60. Explain factors contributing to unequal distribution of income in a market economy
(E-1 C-H3)
Birth: People have different parents, and their parents’ differences in accumulated savings and differences in educational choices and opportunities have led to differences in incomes for those in the current generation. We should also think about the differences in genetic and social inheritance that different parents give their children. The differences in parents’ incomes remain with this answer. We have to look further.
Choice: As seen above, people make choices that affect the amount of human capital that they accumulate. Differences in preferences for current consumption vs. future consumption, what economists would call differences in people’s personal discount rate (the tradeoff of future vs. present consumption) or what psychologists would refer to as the choice to delay gratification, plays a big role in the amount of human capital a person can accumulate. Human capital investment often means being willing to live relatively cheaply early on in your life so that you may enjoy a higher income later in your life.
One choice that has a very large impact on a person’s income is the decision to drop out of high school. Dropping out eliminates most of the choices that lead to good paying jobs.
A choice that has a significant impact on the distribution of income is the choice to be a single parent (usually, a single mother). This is a decision with numerous moral and ethical dimensions.
Of course, choices to break laws, particularly laws concerning possession and distribution of drugs, lead to arrest records
Luck: The choice of what profession to take up, since it may involve a great deal of sunk costs, or investment in human capital, means we have to make decisions about which field of work to go into before knowing what the pay will be in that field by the time we are able to work and earn in that line of work. Changing tastes in the population, innovations, changing conditions in laws that affect particular markets, etc. all contribute to unpredictable future wages in various lines of work. We have no choice but to be entrepreneurial in our selection of lines of work to go into, and the better we predict future wages for different fields where we might be able to work and earn, the better we come out in the income distribution.
Discrimination: As much as most people would like to eliminate racial, ethnic, sexual, and other types of discrimination, discrimination remains as one of several reasons for
Political Power and Special Treatment
61. Interpret a chart or graph displaying various income distributions (e.g., in the United
States vs. the Third World, various groups within a country) (E-1C-H3)
http://ingrimayne.saintjoe.edu/econ/AllocatingRationing/MeasuringIncomeDist.html
62. Distinguish monetary policy from fiscal policy (E-1 C-H4)
Fiscal policy is a set of policies that involve the spending and taxation of the federal government. Changes in spending by the government and/or changes in taxes or other sources of government revenue, policies that would affect the government budget (or fisc), are termed fiscal policy.
Monetary policy is any policy that affects the money supply in the country. Monetary policy is usually enacted of set in place by the country’s central bank.
http://ingrimayne.saintjoe.edu/econ/FiscalDead/Overview14newa.html
http://ingrimayne.saintjoe.edu/econ/FiscalDead/LifeCycle.html
http://ingrimayne.saintjoe.edu/econ/FiscalDead/PermIncome.html
http://ingrimayne.saintjoe.edu/econ/FiscalDead/MeasureFiscal.html
http://ingrimayne.saintjoe.edu/econ/FiscalDead/deadone.htm
http://ingrimayne.saintjoe.edu/econ/FiscalDead/deadtwo.htm
http://ingrimayne.saintjoe.edu/econ/FiscalDead/Lags.html
http://ingrimayne.saintjoe.edu/econ/FiscalDead/deadfour.htm
63. Explain the role of the Federal Reserve System as the central banking system of the
United States (E-1 C-H4)
The Federal Reserve Website:
http://www.federalreserve.gov/
A list of other central bank websites:
http://econltsn.ilrt.bris.ac.uk/links/banks.htm
64. Explain the role of regulatory agencies in the U.S. economy (E-1 C-H4)
http://fte.org/teachers/lessons/efl/efllesson6.htm
65. Explain the role of the Federal Deposit Insurance Corporation (FDIC) (E-1 C-H4)
The movies “Mary Poppins” and “It’s a Wonderful Life” have something in common. In both movies there was a run on the bank (or the Savings and Loan in It’s a Wonderful Life). Runs on banks were common before the FDIC, but really haven’t happened much since then. A “run on a bank” occurs when people begin to believe that banks will not give people their money. In “Mary Poppins” the father of the family, a banker, was trying to get his son to put money the father had given the boy into the bank. The son did not want to put his money into the bank, but instead wanted to give his money to the old lady outside the bank to feed the birds. When people heard the son ask the father for his money and the father refused, they thought something was wrong with the “solvency” of the bank, that they could not give the boy his two pence (pronounced tŭ′ - pěnce). When people start worrying that the bank cannot give them back money that they had deposited in the bank, they ask for their money back. As more people come to the bank to withdraw their funds, the bank soon runs out of cash to pay people.
Banks typically are insolvent. Their short-term liabilities exceed their short-term assets, that is, the deposits banks owe their banking customers exceed the bank’s cash on hand and their deposits with other banks. This is a result of the “fractional reserve” system of banking. Banks are not only allowed, but encouraged, to loan out any money they have over a certain percent of their deposits. Bank customers seldom ask for all of their money at once, except when there is a run on the bank. As Jimmy Stewart’s character in “It’s a Wonderful Life” explained, everyone’s money is not in the bank, but in each others houses, or whatever the loans were for. In essence, banks are ways for people to loan money to each other; the bank is just the go-between, or the “financial intermediary.” Since people seldom need to withdraw all of their money at once, it is usually quite safe for banks to operate insolvently.
Panics can cause runs on banks. Runs on banks put banks in a position where it cannot give people their money, and so, deposits in ruined banks, disappear, because the bank cannot make the payment. Bank deposits are an important part of a modern society’s money supply and make up a much larger share of the money supply than does cash. With runs on banks leading to substantial reductions in the money supply, people can no longer buy goods and services, their financial losses are made up by increases in savings. People reduce their buying and people who worked producing goods and services find that they aren’t needed at their work because people are not buying as much as they once did. Massive layoffs ensue. This is a depression or what was once called a panic.
Since runs on banks lead to great reductions in production and incomes, people with in the federal government realized that if the government would guarantee deposits in banks and savings and loans, people would not rush to take their money out of a bank at the hint or rumor that something was wrong at the bank. The FDIC insures deposits and makes people feel safe about their deposits; they do not panic. Since the inception of the FDIC there have been no widespread runs on banks and even though economic downturns still occur, they are not as deep or as severe and do not last as long as the panics and the Great Depression of the 1930s.
Social
Studies
Grade-Level
Expectations
Economics
Fundamental
Economic Concepts
8th
grade
42. Analyze situations involving scarcity (limited resources) at the individual, group, and societal
levels to
determine the need for choices or what is gained/lost by a decision (E-1A-M1)
43. Explain how effective economic decisions (e.g., determining the best level of consumption)
require comparing the additional costs of alternatives with additional benefits (E-1 A-M2)
44. Explain choice/trade-offs, cost/benefits, and opportunity costs related to making
personal economic decisions (E-1A-M3)
45. Analyze the role of specialization in Louisiana's economy (E-1A-M4)
46. Use a variety of resources to research education and training for jobs and careers
(E-1 A-M5)
47. Cite examples of how skills/knowledge and technical training increase personal
productivity and career opportunities, and which skills/knowledge would enhance
particular career prospects (E-1A-M5)
48. Characterize and analyze the use of productive resources in an economic system
(E-1A-M6)
49. Describe how the four basic economic questions are answered in traditional vs.
command vs. market economies (E-1A-M6)
50. Describe institutions (e.g., banks, government agencies, large companies, small
businesses) that make up economic systems (E-1A-M7)
51. Use economic concepts (e.g., scarcity, opportunity cost) to explain historic and
contemporary events and developments in
Individuals, Households, Businesses, and Governments
52. Explain how supply and demand affect prices (E-1 B-M1)
53. Explain and analyze factors affecting production and allocation of goods/services in
Louisiana and the United States (E-1 B-M2)
54. Explain the difference between private goods/services and public goods/services and
give examples of each (E-1 B-M3)
55. Identify the costs and benefits of a given government policy (e.g., trade agreements,
minimum wage) on a competitive market (E-1 B-M4)
56. Identify various types of taxes and user fees and predict their consequences (E-1 B
M5)
57. Explain reasons for trade between nations and the impact of international trade (E
1 B-M6)
58. Describe historical and economic factors influencing the economic growth,
interdependence,
and development of
production, oil boom and decline) (E-1 B-M7)
The Economy as a Whole
59. Explain the meaning of various economic indicators that help describe the state of an
economy (e.g.,GDP, CPI, stock market indices, rate of unemployment or inflation)(E-1C-M1)
60. Define inflation and unemployment in terms of an economic system as a whole (E
1 C-M2)
61. Describe the influence/impact of inflation or unemployment on different groups of
people (e.g., consumers, business owners) (E-1 C-M2)
7th
Grade
Economics
Fundamental
Economic Concepts
http://www.kcmsd.k12.mo.us/curriculum/designer/CR45485.HTM
41. Use economic concepts (e.g., supply and demand, interdependence) to explain Mercantilism and describe its role in British colonization and the conflict between the thirteen American colonies and Great Britain (E-1A-M9)
Individuals,
Households, Businesses, and Governments
42. Identify U.S. exports and imports that contributed to the U.S economic interdependence with Europe and other parts of the world during the eighteenth and nineteenth centuries (E-1B-M6)
6th Grade
Economics
Fundamental
Economic Concepts
12. Explain the role of expanding specialization in the development of world civilizations
(E-1A-M4)
13. Identify the functions and characteristics of money (e.g., money as a store of value)
and compare barter exchange to money exchange (E-1A-M8)
14. Use economic concepts (e.g., supply and demand, interdependence) to describe the
economic motivations for expanding trade and territorial domination in world history
(E-1A-M9)
5th Grade
Economics
Fundamental Economic Concepts
18. Describe economic activities within and among American Indian cultures prior to
contact with Europeans (E-1A-M9)
19. Use economic concepts (e.g., supply and demand, scarcity, interdependence) to
identify the economic motivations for European exploration and settlement in the
Americas (E-1 A-M9)
4th
Grade
Economics
Fundamental Economic Concepts
36. Demonstrate that limited resources necessitate choices and decisions (E-1A-E1)
37. Explain the factors, including trade-ofts, involved in a choice or decision (e.g., discuss the
choices and decisions involved in developing a personal budget) (E-1AE4)
38. Identify the four basic questions all producers must answer (i.e., What will be produced?
How will it be produced? For whom will it be produced? How much will be produced?)
(E-1A-E5)
39. Describe the combination of natural, human, and capital resources needed to produce a given
good (e.g., a candy bar) or given service (e.g., recycling paper) (E1 A-E6)
40. Define some effects of division of labor and specialization in a given context, such as
a simple assembly line (e.g., greater labor productivity/output per hour) (E-1A-E7)
41. Describe the benefits of increasing one's skill/knowledge and various ways to do so
(E-1 A-E8)
42. Describe the basic concept of a market (e.g., exchange of goods/services between
buyers and sellers) and identify ways of transporting goods (E-1 A-E9)
43. Identify the roles of banks, governments, businesses, and households in the
economy (E-1A-E10)
44. Identify the relationship between money, writing checks, and credit cards
(E-1A-E11)
45. Explain why people engage in voluntary exchange/barter/direct trading (E-1A-E11)
Individuals, Households, Businesses, and
Governments
46. Describe how supply and demand affect the price of a good or service in a given
situation (E-1 B-E1)
47. Explain how a rise or fall in prices affects personal, family, and government budgets
(E-1 B-E2)
48. Identify the terms profit and risk and give examples of risk that businesses take to
make a profit (E-1 B-E3)
49. Define tax and explain how government pays for goods and services through taxes
and fees (E-1 B-E4)
3rd Grade
Economics
Fundamental Economic Concepts
31. Define scarcity and abundance and give examples of both for individuals and society
(E-1A-E1)
32. Compare benefits and costs when making choices (e.g., comparative shopping) (E1 A-E2)
33. Explain reasons why people save money (E-1A-E3)
34. Identify examples of making an economic choice and explain the idea of opportunity
cost (i.e., what is given up when making a choice) (E-1A-E4)
35. Describe ways in which people are producers and consumers and why they depend
on one another (e.g., in the school and/or in the community) (E-1A-E5)
36. Identify examples of natural, human, and capital resources used to produce goods
and services (E-1 A-E6)
37. Identify the concepts of specialization (Le., being an expert in one job, product, or
service) and interdependence (Le., depending on others) in the production of goods
and services (E-1A-E7)
38. Describe the requirements of various jobs and the characteristics of a job well
performed (E-1 A-E8)
39. Identify goods that are produced within the local community and Louisiana and
describe how they are shipped elsewhere for sale (E-1A-E9)
40. Identify various types of economic institutions that make up the economy (e.g.,
households, businesses, banks, government) (E-1A-E10)
41. Discuss trade in the local community and explain how trade benefits both parties (E
1A-E11)
Individuals, Households, Businesses, and Governments
42. Describe the basic principles of supply and demand and how competition can affect
prices of goods (E-1 B-E1)
43. Explain the effect of increase/decrease in price upon the consumer and producer (E
1 B-E2)
44. Identify services provided by the state government (E-1 B-E4)
45. Identify major goods and services produced in Louisiana (E-1 B-E5)
2nd Grade
Economics
Fundamental Economic Concepts
29. Explain how basic human needs of food, clothing, and shelter can be met (E-1A-E1)
30. Identify examples of scarcity in the local community (E-1A-E1)
31. Identify what is gained and what is lost (given up) in choosing one of several
alternatives (e.g., skating with friends versus bowling with parents) (E-1A-E2)
32. Identify examples of choices families make when buying goods and services (E-1A
E4)
33. Identify a consumer and a producer and their roles in the economy (E-1A-E5)
34. Explain how people in the local community depend on each other for goods and
services (E-1 A-E5)
35. Identify various ways in which resources are used (e.g., use of trees to produce
wood for building, wood products, heat) (E-1A-E6)
36. Describe the roles of farmers, processors, and distributors in food production and
consumption (E-1A-E6)
37. Describe the role of weather, land, and water resources in food production overtime
(E-1 A-E6)
38. Identify the specialized work that people do to manufacture, transport, and market
goods and services (E-1A-E7)
39. Describe the importance of skills and education in choosing a career (E-1A-E8)
40. Identify a local economic institution (e.g., bank) (E-1 A-E1 0)
41. Explain why people exchange goods and services (E-1A-E11)
Individuals,
Households, Businesses, and Governments
42. Identify individuals or groups in the community who have started new businesses
(E-1 B-E3)
43. Identify goods and seNices provided by the local government (E-1 B-E4)
44. Explain the difference between goods and services and give examples of each within
the local community (E-1 B-E5)
1st Grade
Economics
Fundamental
Economic Concepts
25. Identify the difference between basic human needs and wants (E-1 A-E3)
26. Identify a personal example of how the cost of an item affects whether or not it can
be purchased (E-1A-E4)
27. Describe how the individual is a consumer (E-1 A-E5)
28. Identify simple descriptions of the work people do and the names of related jobs in
the community (E-1A-E7)
29. Explain why people in a school and community have different jobs (E-1A-E7)
30. Describe skills the student can do well (e.g., personal, physical, academic) (E-1AE8)
31. Describe the benefits of a voluntary exchange (E-1A-E11)
Kindergarten
Economics
Fundamental
Economic Concepts
14. Identify ways people use money to purchase goods (E-1A-E3)
15. Identify work people do and the name of related jobs at home and school (E-1A-E7)
16. Describe a situation illustrating a voluntary exchange (e.g., trading seats, exchanging
books) (E-1A-E11)
PK
Economics
Fundamental Economic Concepts
6. Demonstrate an awareness of the uses of money in play activities (PK-CSS-E1) (E
1 A-E3)