Social Studies, Grade 12, Economics, 2004
1.) Explain the role of scarcity in answering the basic economic questions of what, how, how much, and for whom to produce.
Example: opportunity cost
Identifying positive and negative aspects of economic growth
Explaining how voluntary trade between nations illustrates the benefits of comparative advantage
Example: geographic allocation of resources determining trading advantage
Identifying how factors of production and the circular flow of goods and services meet market needs
2.) Compare the development and characteristics of the world's traditional, command, and market economies.
Identifying contributors to modern economics
Examples: Adam Smith and laissez-faire, Karl Marx and Communism
Describing the struggle experienced by economies in transition from one type of economic system to another
Examples: Russia, Vietnam, Romania, Iraq, China
Explaining how the desire for growth potential, labor supplies, product supplies, and adaptive capability influence a country's choice of economic system
Comparing costs and benefits of economic growth
Explaining why the characteristics of a market economy result in a thriving economy
Examples: importance of well-defined private property rights, importance of a well-functioning price system
Contrasting economic systems of various countries with the market system of the United States
Examples: Japan, Germany, United Kingdom, China, Cuba, North Korea, Mexico, Canada, transitioning economies of former Soviet Union
3.) Analyze graphs to determine changes in supply and demand and their effect on equilibrium price and quality.
Illustrating how changes in the determinants of supply and demand affect the supply and demand for products in the market
Examples: prices of related goods, consumer tastes and preferences, expectations of future prices, number of consumers and producers
Explaining the impact of government-imposed price ceilings and floors and the impact of taxes and regulations on the market demand for a product
4.) Explain the impact of the labor market on the market economy of the United States.
Examples: effects of different types of labor unions, the role played by labor productivity
Identifying regional characteristics of the labor force of the United States
Example: providing breakdown of gender, race, socioeconomic background, education, age, and regional specialization
Explaining how supply and demand for labor affect wages
Describing characteristics that are most likely to increase wages and nonwage benefits
Examples: skills, productivity, education, occupation, mobility
5.) Explain the competitive nature of the market system.
Examples: purely competitive markets, oligopolistic markets, governmental-created monopolies, natural monopolies
Comparing structures of sole proprietorships, partnerships, corporations, and cooperatives
Describing costs and benefits of entrepreneurial decisions
Describing how market exchange serves as a means of economic planning for producers
Describing the structure and functions of financial markets, including the stock market and the bond market
6.) Explain costs and benefits of government intervention in the economy of the United States.
Identifying economic goals for the economy of the United States
Examples: economic growth, economic efficiency, economic security, economic freedom
Tracing the impact of government regulations on business and labor relations
Explaining conditions under which government intervention may be chosen
Examples: absence of incentives, negative externalities, need for consumer and labor protection
Comparing principles and systems of taxation at national, state, and local levels
Examples: flat tax; progressive, regressive, and proportional taxes; income, sales, property, and excise taxes
Predicting the effect of public policy decisions on the individual
Examples: positive and negative externalities, public goods and services versus private goods and services
Explaining costs and benefits of running a deficit and large national debt in an economy
Examples: rising interest rates, crowding-out effect, hyperinflation of currency, stimulation of a sluggish economy
Describing the effect of the patent system of the United States on the number of inventions produced by American inventors
7.) Describe methods by which the United States measures domestic output, national income, and price level.
Examples: Gross Domestic Product (GDP), National Income (NI), Personal Income (PI), Disposable Income (DI), price indexes, Consumer Price Index (CPI), GDP deflator
Identifying the contribution of final goods and services to the computation of the GDP
Comparing data from various regions of the United States and other national economies
Describing the function and construction of the CPI
Examples: construction of the market basket, current versus real dollars
8.) Describe the effect of fluctuations in national output and its relationship to the causes and costs of unemployment and inflation.
Identifying factors involved in the business cycle
Examples: phases, causes, indicators
Contrasting monetary, cost-push, and demand-pull inflation
Contrasting frictional, structural, seasonal, and cyclical unemployment
Describing components of the unemployment statistic as defined by the Bureau of Labor Statistics
Identifying reasons for regional differences in unemployment statistics
Discussing the positive and negative aspects of government policies affecting unemployment and underemployment
Examples: minimum wage, age regulations
Comparing causes for unemployment in Alabama to those of the nation
9.) Describe economic stabilization policies of the United States.
Explaining how levels of taxes, government spending, and interest rates affect consumer consumption and saving
Explaining fiscal policy options for manipulating levels of output and inflation
Examples: Keynesian theory, supply-side theory, monetarist theory, rational expectations theory
10.) Explain the role of money and the structure of the banking system of the United States.
Examples: Federal Reserve bank, United States Treasury, federally funded insurance programs
Contrasting the effectiveness of bartering and money exchange in an economic system
Explaining the creation of money through the multiplier effect
Explaining the origins of the Federal Reserve bank and its influence on inflation and deflation
Explaining the function of federally funded insurance programs in protecting consumers' savings
Example: protection of personal bank accounts by Federal Savings and Loan Insurance Corporation (FSLIC) and Federal Deposit Insurance Corporation (FDIC)
11.) Explain the past and present impact of the Federal Reserve bank on the economy of the United States.
Describing the structure and monetary policies of the Federal Reserve bank
Describing tools available to the Federal Reserve bank to stabilize the economy
Examples: altering reserve requirement, changing discount rate, performing federal open-market operations
Identifying primary responsibilities of the Federal Reserve bank
Examples: serving as "Bankers' Bank," creating a stable banking system, conducting monetary policy, stabilizing the business cycle and inflation rate
12.) Explain basic elements of international trade.
Analyzing the impact of developing nations on the global economy
Analyzing the impact of the trade deficit on the economy of the United States
Explaining how trading according to the Law of Comparative Advantage affects both poor and wealthy trading nations
Analyzing the impact of trade policy on international trade
Describing political and economic alliances
Examples: OPEC, General Agreement on Tariffs and
Trade (GATT), NAFTA, European Economic
Community (EEC), European Union