Economics

Standard 1   more info »

Scarcity

  • Students will understand that: Productive resources are limited. Therefore, people cannot have all the goods and services they want; as a result, they must choose some things and give up others.
    • Students will be able to use this knowledge to: Identify what they gain and what they give up when they make choices.
Standard 2   more info »

Decision Making

  • Students will understand that: Effective decision making requires comparing the additional costs of alternatives with the additional benefits. Many choices involve doing a little more or a little less of something: few choices "are all or nothing" decisions.
    • Students will be able to use this knowledge to: Make effective decisions as consumers, producers, savers, investors, and citizens.
Standard 3   more info »

Allocation

  • Students will understand that: Different methods can be used to allocate goods and services. People acting individually or collectively must choose which methods to use to allocate different kinds of goods and services.
    • Students will be able to use this knowledge to: Evaluate different methods of allocating goods and services, by comparing the benefits to the costs of each method.
Standard 4   more info »

Incentives

  • Students will understand that: People usually respond predictably to positive and negative incentives.
    • Students will be able to use this knowledge to: Identify incentives that affect people's behavior and explain how incentives affect their own behavior.
Standard 5   more info »

Trade

  • Students will understand that: Voluntary exchange occurs only when all participating parties expect to gain. This is true for trade among individuals or organizations within a nation, and among individuals or organizations in different nations.
    • Students will be able to use this knowledge to: Negotiate exchanges and identify the gains to themselves and others. Compare the benefits and costs of policies that alter trade barriers between nations, such as tariffs and quotas.
Standard 6   more info »

Specialization

  • Students will understand that: When individuals, regions, and nations specialize in what they can produce at the lowest cost and then trade with others, both production and consumption increase.
    • Students will be able to use this knowledge to: Explain how they can benefit themselves and others by developing special skills and strengths.
Standard 7   more info »

Markets and Prices

  • Students will understand that: Markets exist when buyers and sellers interact. This interaction determines market prices and thereby allocates scarce goods and services.
    • Students will be able to use this knowledge to: Identify markets in which they have participated as a buyer and seller and describe how the interaction of all buyers and sellers influences prices. Also, predict how prices change when there is either a shortage or surplus of the product available.
Standard 8   more info »

Role of Prices

  • Students will understand that: Prices send signals and provide incentives to buyers and sellers. When supply or demand changes, market prices adjust, affecting incentives.
    • Students will be able to use this knowledge to: Predict how changes in factors such as consumers' tastes or producers' technology affect prices.
Standard 9   more info »

Competition and Market Structure

  • Students will understand that: Competition among sellers usually lowers costs and prices, and encourages producers to produce what consumers are willing and able to buy. Competition among buyers increases prices and allocates goods and services to those people who are willing and able to pay the most for them.
    • Students will be able to use this knowledge to: Explain how changes in the level of competition in different markets can affect price and output levels.
Standard 10   more info »

Institutions

  • Students will understand that: Institutions evolve and are created to help individuals and groups accomplish their goals. Banks, labor unions, markets, corporations, legal systems, and not-for-profit organizations are examples of important institutions. A different kind of institution, clearly defined and enforced property rights, is essential to a market economy.
    • Students will be able to use this knowledge to: Describe the roles of various economic institutions and explain the importance of property rights in a market economy.
Standard 11   more info »

Money and Inflation

  • Students will understand that: Money makes it easier to trade, borrow, save, invest, and compare the value of goods and services. The amount of money in the economy affects the overall price level. Inflation is an increase in the overall price level that reduces the value of money.
    • Students will be able to use this knowledge to: Explain how their lives would be more difficult in a world with no money, or in a world where money sharply lost its value.
Standard 12   more info »

Interest Rates

  • Students will understand that: Interest rates, adjusted for inflation, rise and fall to balance the amount saved with the amount borrowed, which affects the allocation of scarce resources between present and future uses.
    • Students will be able to use this knowledge to: Explain situations in which they pay or receive interest, and explain how they would react to changes in interest rates if they were making or receiving interest payments.
Standard 13   more info »

Income

  • Students will understand that: Income for most people is determined by the market value of the productive resources they sell. What workers earn primarily depends on the market value of what they produce.
    • Students will be able to use this knowledge to: Predict future earnings based on their current plans for education, training, and career options.
Standard 14   more info »

Entrepreneurship

  • Students will understand that: Entrepreneurs take on the calculated risk of starting new businesses, either by embarking on new ventures similar to existing ones or by introducing new innovations. Entrepreneurial innovation is an important source of economic growth.
    • Students will be able to use this knowledge to: Identify the risks and potential returns to entrepreneurship, as well as the skills necessary to engage in it. Understand the importance of entrepreneurship and innovation to economic growth, and how public policies affect incentives for and, consequently, the success of entrepreneurship in the United States.
Standard 15   more info »

Economic Growth

  • Students will understand that: Investment in factories, machinery, new technology, and in the health, education, and training of people stimulates economic growth and can raise future standards of living.
    • Students will be able to use this knowledge to: Predict the consequences of investment decisions made by individuals, businesses, and governments.
Standard 16   more info »

Role of Government and Market Failure

  • Students will understand that: There is an economic role for government in a market economy whenever the benefits of a government policy outweigh its costs. Governments often provide for national defense, address environmental concerns, define and protect property rights, and attempt to make markets more competitive. Most government policies also have direct or indirect effects on people's incomes.
    • Students will be able to use this knowledge to: Identify and evaluate the benefits and costs of alternative public policies, and assess who enjoys the benefits and who bears the costs.
Standard 17   more info »

Government Failure

  • Students will understand that: Costs of government policies sometimes exceed benefits. This may occur because of incentives facing voters, government officials, and government employees, because of actions by special interest groups that can impose costs on the general public, or because social goals other than economic efficiency are being pursued.
    • Students will be able to use this knowledge to: Identify some public policies that may cost more than the benefits they generate, and assess who enjoys the benefits and who bears the costs. Explain why the policies exist.
Standard 18   more info »

Economic Fluctuations

  • Students will understand that: Fluctuations in a nation's overall levels of income, employment, and prices are determined by the interaction of spending and production decisions made by all households, firms, government agencies, and others in the economy. Recessions occur when overall levels of income and employment decline.
    • Students will be able to use this knowledge to: Interpret media reports about current economic conditions and explain how these conditions can influence decisions made by consumers, producers, and government policy makers.
Standard 19   more info »

Unemployment and Inflation

  • Students will understand that: Unemployment imposes costs on individuals and the overall economy. Inflation, both expected and unexpected, also imposes costs on individuals and the overall economy. Unemployment increases during recessions and decreases during recoveries.
    • Students will be able to use this knowledge to: Make informed decisions by anticipating the consequences of inflation and unemployment.
Standard 20   more info »

Fiscal and Monetary Policy

  • Students will understand that: Federal government budgetary policy and the Federal Reserve System's monetary policy influence the overall levels of employment, output, and prices.
    • Students will be able to use this knowledge to: Anticipate the impact of the federal government and the Federal Reserve System macroeconomic policy decisions on themselves and others.