Related Economics and Personal Finance Standards of Learning
Economics and Personal Finance Standards of Learning
The student will demonstrate knowledge of basic economic concepts and structures by
- describing how consumers, businesses, and government decision makers face scarcity of resources and must make trade-offs and incur opportunity costs;
- explaining that choices often have long-term unintended consequences;
- describing how effective decision making requires comparing the additional costs (marginal costs) and additional benefits (marginal benefits);
- identifying factors of production;
- comparing the characteristics of market, command, tradition, and mixed economies; and
- identifying Adam Smith and describing the characteristics of a market economy.
The student will demonstrate knowledge of the role of producers and consumers in a market economy by
- describing how consumers, producers, workers, savers, investors, and citizens respond to incentives;
- explaining how businesses respond to consumer sovereignty;
- identifying the role of entrepreneurs;
- comparing the costs and benefits of different forms of business organization, including sole proprietorship, partnership, corporation, franchise, and cooperative;
- describing how costs and revenues affect profit and supply;
- describing how increased productivity affects costs of production and standard of living;
- examining how investment in human capital, capital goods, and technology can improve productivity;
- describing the effects of competition on producers, sellers, and consumers;
- explaining why monopolies or collusion among sellers reduces competition and raises prices; and
- illustrating the circular flow of economic activity.
The student will demonstrate knowledge of the price system by
- examining the laws of supply and demand and the determinants of each;
- explaining how the interaction of supply and demand determines equilibrium price;
- describing the elasticity of supply and demand; and
- examining the purposes and implications of price ceilings and price floors.
The student will demonstrate knowledge that many factors affect income by
- examining the market value of a worker’s skills and knowledge;
- identifying the impact of human capital on production costs;
- explaining the relationship between a person’s own human capital and the resulting income potential; and
- describing how changes in supply and demand for goods and services affect income.
The student will develop consumer skills by
- examining basic economic concepts and their relation to product prices and consumer spending;
- examining the effect of supply and demand on wages and prices;
- describing the steps in making a purchase decision, including the roles of marginal benefit and marginal cost;
- determining the consequences of conspicuous consumption;
- describing common types of contracts and the implications of each;
- demonstrating comparison-shopping skills;
- maintaining a filing system for personal financial records;
- examining the impact of advertising and marketing on consumer demand and decision making in the global marketplace;
- accessing reliable financial information from a variety of sources;
- explaining consumer rights, responsibilities, remedies, and the importance of consumer vigilance; and
- examining precautions for protecting identity and other personal information.
The student will demonstrate knowledge of planning for living and leisure expenses by
- comparing the costs and benefits of purchasing vs. leasing a vehicle;
- comparing the advantages and disadvantages of renting vs. purchasing a home;
- describing the process of renting housing;
- describing the process of purchasing a home;
- calculating the cost of utilities, services, maintenance, and other housing expenses; and
- evaluating discretionary spending decisions.
The student will demonstrate knowledge of banking transactions by
- comparing the types of financial institutions;
- examining how financial institutions affect personal financial planning;
- evaluating services and related costs associated with personal banking;
- differentiating among types of electronic monetary transactions;
- preparing all forms necessary for opening and maintaining a checking and a savings account;
- reconciling bank statements;
- comparing costs and benefits of online and traditional banking; and
- explaining how certain historical events have influenced the banking system and other financial institutions.
The student will demonstrate knowledge of credit and loan functions by
- evaluating the various methods of financing a purchase;
- analyzing credit card features and their impact on personal financial planning;
- identifying qualifications needed to obtain credit;
- identifying basic provisions of credit and loan laws;
- comparing terms and conditions of various sources of consumer credit;
- identifying strategies for effective debt management, including sources of assistance;
- explaining the need for a good credit rating;
- comparing the costs and conditions of secured and unsecured loans; and
- comparing the types of voluntary and involuntary bankruptcy and the implications of each.
The student will demonstrate knowledge of the role of insurance in risk management by
- evaluating insurance as a risk management strategy;
- distinguishing among the types, costs, and benefits of insurance coverage, including automobile, life, property, health, and professional liability; and
- explaining the roles of insurance in financial planning.
The student will demonstrate knowledge of income earning and reporting by
- examining how personal choices about education, training, skill development, and careers impact earnings;
- differentiating among sources of income;
- calculating net pay;
- investigating employee benefits and incentives; and
- completing a standard W-4 form.
The student will demonstrate knowledge of taxes by
- describing the types and purposes of local, state, and federal taxes and the way each is levied and used;
- exploring how tax structures affect consumers, producers, and business owners differently;
- computing local taxes on products and services;
- examining potential tax deductions and credits on a tax return;
- explaining the content and purpose of a standard W-2 form; and
- explaining the similarities and differences between state and federal taxation of inheritances.
The student will demonstrate knowledge of personal financial planning by
- identifying short-term and long-term personal financial goals;
- identifying anticipated and unanticipated income and expenses;
- examining components and purposes of a personal net worth statement;
- developing a personal budget;
- investigating the effects of government actions and economic conditions on personal financial planning; and
- explaining how economics influences a personal financial plan.
The student will demonstrate knowledge of investment and savings planning by
- comparing the impact of simple interest vs. compound interest on savings;
- comparing and contrasting investment and savings options;
- explaining costs and income sources for investments;
- examining the fundamental workings of Social Security and the system's effects on retirement planning;
- contrasting alternative retirement plans; and
- describing how the stock market works.