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Economics State Standards

ECONOMICS

Standard ECON-1: The student will demonstrate an understanding of how scarcity and choice impact the decisions of families, businesses, communities, and nations.

Enduring Understanding

Economics is the science of choice. The study of economics equips a student with the knowledge to evaluate the benefits versus the costs of goods and services. To make informed decisions about benefits versus costs, the student will utilize the knowledge and skills set forth in the following indicators:

Indicators

ECON-1.1 Explain that the practice of economic decision making is an evaluation process that measures additional benefits versus additional costs.

ECON-1.2 Explain why the productive resources of land, labor, and capital are limited.

ECON-1.3 Apply the concept that people respond to positive and negative incentives to past and current economic decisions.
 

Standard ECON-2: The student will demonstrate an understanding of how markets facilitate exchange and how market regulation costs both consumers and producers.

Enduring Understanding

Markets arise in order to allow people and institutions to trade items of value for something else of value. Markets are efficient when they are unrestricted. The prices in a market send signals and provide incentives to buyers and sellers. To understand how markets function, the student will utilize the knowledge and skills set forth in the following indicators:

Indicators

ECON-2.1 Illustrate how markets are created when voluntary exchanges occur between buyers and sellers.

ECON-2.2 Explain how efficient markets allocate goods, services, and the factors of production in a market-based economy.

ECON-2.3 Illustrate how competition among sellers lowers costs and prices.

ECON-2.4 Illustrate how an economically efficient market allocates goods and services to the buyers who are willing to pay for them.

ECON-2.5 Explain how business cycles, market conditions, government policies, and inequalities affect the living standards of individuals and other economic entities.

ECON-2.6 Explain how market power enables some market structures to affect their situations to varying degrees and to use this market power to increase prices and reduce output.

Standard ECON-3: The student will demonstrate an understanding of how government policies, business cycles, inflation, deflation, savings rates, and employment affect all economic entities.

Enduring Understanding

Macroeconomics examines the aggregate behavior of the economy: price levels, business cycles, Federal Reserve policies, and inflation and deflation, as well as the ways that changes in these aggregate levels affect individual economic entities. To understand economic behavior, the student will utilize the knowledge and skills set forth in the following indicators:

Indicators

ECON-3.1 Explain that institutions in a market economy help individuals and groups accomplish their goals.

ECON-3.2 Illustrate how money and the consequent banking system facilitate trade, historically and currently.

ECON-3.3 Explain how real interest rates adjust savings with borrowing, thus affecting the allocation of scarce resources between present and future users.

ECON-3.4 Use a circular flow diagram to explain how changes in economic activity affect households and businesses.

ECON-3.5 Explain how the federal government regulates the American economy in order to provide economic security, full employment, and economic equity.

ECON-3.6 Explain how economic indicators are used to evaluate changes in economic activity.

ECON-3.7 Illustrate the relationships among business cycles and unemployment, growth, price levels, wage rates, and investment.

ECON-3.8 Explain how the Federal Reserve regulates the amount of cash that banks can acquire and retain and therefore helps to provide a foundation for economic stability.

ECON-3.9 Exemplify how government, in a market economy, provides for services that private markets fail to provide and thus the costs of government policies often exceed benefits.

Standard ECON-4: The student will demonstrate an understanding of how trade among nations affects markets, employment, economic growth, and other activity in the domestic economy.

Enduring Understanding

The economy of the United States is but one system operating within an increasingly global arena. All institutions and individuals in the United States are impacted in varying degrees by global commerce. To understand the implications of the global economy, the student will utilize the knowledge and skills set forth in the following indicators:

Indicators

ECON-4.1 Summarize how differing factor endowments—such as geography, the development of technology, and the abundance of labor—affect the goods and services in which a nation specializes.

ECON-4.2 Explain how the United States specializes in the production of those goods and services in which it has a comparative advantage.

ECON-4.3 Explain how the rise of a global marketplace contributes to the well-being of all societies but the benefits derived from globalization are unequal.

ECON-4.4 Explain how a global marketplace influences domestic labor markets, wage rates, unemployment levels, and disparities in earning potentials.

Standard ECON-5: The student will demonstrate an understanding of how personal financial decisions affect an individual’s present and future economic status.

Enduring Understanding

Individuals are impacted by the financial choices they make and the careers they choose. Wise and informed personal financial decisions can benefit individuals in both the immediate and the distant future. To understand the impact of personal financial decisions, the student will utilize the knowledge and skills set forth in the following indicators:

Indicators

ECON-5.1 Explain how individuals make personal economic decisions and how current spending and acquisition of debt can impact future income.

ECON-5.2 Explain that income for most people is determined by the market value of the productive resources they sell.

ECON-5.3 Explain how wage rates for most workers depend upon the market value of what the workers produce for the marketplace.