Standards for Private: What causes inflation?

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Name: Fiscal and Monetary Policy

Standard: 20

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.

Name: Incentives

Standard: 4

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.

Name: Interest Rates

Standard: 12

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.

Name: Markets and Prices

Standard: 7

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.

Name: Role of Prices

Standard: 8

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.

Name: Unemployment and Inflation

Standard: 19

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.

Name: Saving

Standard: 3

Students will understand that: People who have sufficient income can choose to save some of it for future uses such as emergencies or later purchases. Savings decisions depend on individual preferences and circumstances. Funds needed for transactions, bill-paying, or purchases, are commonly held in federally insured checking or savings accounts at financial institutions because these accounts offer easy access to their money and low risk. Interest rates, fees, and other account features vary by type of account and between financial institutions, with higher rates resulting in greater compound interest earned by savers.

Name: Spending

Standard: 2

Students will understand that: A budget is a plan for allocating a person’s spendable income to necessary and desired goods and services. When there is sufficient money in their budget, people may decide to give money to others, save, or invest to achieve future goals. People can often improve their financial wellbeing by making well-informed spending decisions, which includes critical evaluation of price, quality, product information, and method of payment. Individual spending decisions may be influenced by financial constraints, personal preferences, unique needs, peers, and advertising.

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