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Economics
Course Description: This course teaches the concepts of scarcity, production, supply
and demand, banking, and a study of the nation’s economy. Practical application of
these concepts is stressed. This course is required for graduation.
Prerequisites: None
Recommended for the Senior year.
Anderson School District Five Economics
August 1, 2005
Economics
Unit 7—Principles of Economics
Economics(Principles and Practices)
Chapter 1
7 days
Indicators
ECON-1.1 Illustrate the relationship between scarcity—limited resources and
unlimited human wants—and the economic choices made by individuals,
families, communities, and nations, including how families must budget
their income and expenses, how people use psychological and intellectual
resources to deal with scarcity, and how local political entities as well as
nation-states use scarce resources to satisfy human wants. (E, G)
ECON-1.2 Explain the concept of opportunity costs and how individuals, families,
communities, and nations make economic decisions on that basis,
including analyzing marginal costs and marginal benefits and assessing
how their choices may result in trade-offs. (E)
ECON-1.3 Compare the four key factors of production—land, labor, capital, and
entrepreneurship—and explain how they are used, including the
specialization and division of labor that permits efficient use of scarce
resources. (E, G)
ECON-3.2 Explain the role of entrepreneurs in a market economy, including the costs
and benefits of being an entrepreneur, the expectation of profit as the
incentive for entrepreneurs to accept business risks, and the effect of
changes in taxation and government regulation on entrepreneurial
decisions. (E)
ECON-3.3 Explain the causes and effects of economic growth, including the
relationship between investment in human resources and in real capital,
the alleviation of poverty, the increase in standards of living, and the
creation of employment opportunities.(E)
ECON-6.1 Compare the various functions and roles of the government in the United
States economy, including providing public goods, defining and enforcing
property rights, correcting externalities and regulating markets,
maintaining and promoting competition in the market, protecting
consumers’ rights, and redistributing income.(E)
Strategies
1. Have students write a one page description of their or their family’s worst
purchase. In groups, students share their purchases, and each group selects a
“winner.” Group winners share with the entire class, and the class selects a class
winner. Create a graphic organizer with the class on why people make bad
purchases.
Anderson School District Five 1 August 1, 2005
Economics
2. Have students make a list on the board of items they believe are free. Take each
item and allow students to give examples when that item is not free. Lead
students to the concept that “There is no such thing as a free lunch.”
3. On the board or overhead, list a variety of resources. Have students categorize
them into land, labor, and capital.
4. Have students keep a list of their purchases for a week and categorize them based
on goods and services. Have them categorize goods into durable and non durable
goods.
5. Discuss the basic economic questions every society must answer.
6. Have students place in their notebooks a decision making grid listing the problem
faced, the advantages and disadvantages of various options, and the solution.
Model for students how the grid can be used in making decisions. Use a decision
you have actually made. For assessment, have students complete a grid based on
a decision they are facing. Use the grid to discuss the concept of opportunity cost,
marginal cost, and marginal benefit.
7. Have students collect articles from the newspaper which describe local, state, or
national governments making budget decisions. Share with the class the most
interesting ones, and
8. let students vote on how they would spend the tax dollars
9. Let students debate a budget issue in which they show interest. For example,
changes in Social Security or money for war versus money for social issues could
be debated.
10. List on the board a variety of situations such as dating only one person in high
school or building new nuclear power plants. Discuss the opportunity cost of each
decision.
11. Using the example in the book on page 23, analyze with students how the
production possibility frontier can be used as a tool for making economic
decisions.
12. Read in chapter 1 about Adam Smith. Have students develop a list of the skills an
economist would need.
13. Create and discuss a circular flow diagram for a market economy on the board.
14. Have students suggest places in the diagram where the market system could
break down. Ask students how the diagram could be redrawn to show
government’s role in the economy.
15. View and discuss the video on Ray Kroc from A&E. Discuss what make Kroc
successful as an entrepreneur.
Anderson School District Five 2 August 1, 2005
Economics
Vocabulary
scarcity non-durable good
factors of production paradox of value
capital utility
land productivity
labor specialization
entrepreneur human capital
economics economic interdependence
trade-off market
opportunity cost factor market
production possibilities frontier resource market
laissez faire product market
invisible hand free enterprise economy
need goods
want services
capital good marginal cost
consumer good marginal benefit
durable good division of labor
Anderson School District Five 3 August 1, 2005
Economics
Unit 8—Economic Systems
Economics(Principles and Practices)
Chapter 2
5 Days
Indicators
ECON-2.2 Explain the nature and role of competition in a market economy, including
the determination of market price through competition among buyers and
sellers and the conditions that make industries more or less competitive,
such as the effect of domestic and international competition and the
quality, quantity, and price of products. (E, G)
ECON-2.3 Explain economic incentives that lead to the efficient use of resources,
including monetary and nonmonetary incentives, the ways in which people
change their behavior in response to incentives, the relationship of
incentives to the laws of supply and demand, and the role of private
property as an incentive in conserving and improving scarce resources. (E)
ECON-5.1 Compare the significant characteristics of a market economy with those of
traditional and command economies, including differences in the roles of
the government, individual firms, and households in decision making;
types of economic institutions; the extent of consumer sovereignty/choice;
and the role of private property rights, competition, and the profit motive.
(E)
ECON-6.1 Compare the various functions and roles of the government in the United
States economy, including providing public goods, defining and enforcing
property rights, correcting externalities and regulating markets,
maintaining and promoting competition in the market, protecting
consumers’ rights, and redistributing income.(E)
ECON-3.1 Compare personal income distribution and functional income distribution,
including how distribution of income affects public policy. (E)
Strategies
1. Let students work in groups to complete a graphic organizer listing market,
traditional, and command economies and the description, strengths and
weaknesses of each. Note similarities and differences during discussion of the
organizers.
2. Help students construct a continuum on the board with pure market at one end
and pure command at the other end. (List traditional over to the side of pure
command.). List various countries on the board and allow students to suggest
others. Then use the CIA World Fact Book online to let students study the
economy of each country on the board and place the country in the proper space
Anderson School District Five 4 August 1, 2005
Economics
on the continuum. For example, the United States would be closer to pure market
than Great Britain. Point out to students that a county’s position can shift over
time. Ask students to use their knowledge of history to list countries and their
changes.
3. Discuss basic economic and social goals that can be used to evaluate economic
performance. (See pages 41-44 of text.). Allow students to evaluate the success
of the United States in achieving each goal. Divide students into groups and direct
each group to give the country a report card grade based on each goal. For
example, students might give the United States a grade of “C” on economic
security. Have groups share and explain their results with the class. To end this
activity, help students define personal income distribution and functional income
distribution. Discuss the Lorenz Curve on page 395 of the text.
4. Play the Econo Game to demonstrate to students how a market economy works.
This game is found in Capstone, Unit 1, lesson 9(older edition) or can also be
found in Economics in Action(14 Greatest Hits) under Activity 10.1. Both books
are published by the National Council on Economic Education.
5. Use lesson 5 in Economics in Action to allow students to discover government’s
role in a market economy. This activity is an inquiry lesson on the proper role of
government.
6. View and discuss the video available from A&E on Sam Walton. Have students use
their knowledge of a market economy to explain why Walton was so successful.
7. As one form of assessment, have students, individually or in groups, write a story
about an imaginary island or country which changes from one economic system to
another. Evaluate the stories on both economic understanding and writing using
the PACT rubric.
Vocabulary
economy economic growth
economic system capitalism
traditional economy voluntary exchange
command economy profit motive
market economy private property
economic freedom consumer sovereignty
economic efficiency mixed economy
economic equity personal income distribution
economic security functional income distribution
full employment Lorenz Curve
price stability
Anderson School District Five 5 August 1, 2005
Economics
Unit 9—The Role of Business in a Market Economy
Economics(Principles and Practices)
Chapter 3
5 Days
Indicators
ECON-3.2 Explain the role of entrepreneurs in a market economy, including the costs
and benefits of being an entrepreneur, the expectation of profit as the
incentive for entrepreneurs to accept business risks, and the effect of
changes in taxation and government regulation on entrepreneurial
decisions. (E)
ECON-3.3 Explain the causes and effects of economic growth, including the
relationship between investment in human resources and in real capital,
the alleviation of poverty, the increase in standards of living, and the
creation of employment opportunities.(E)
ECON-6.1 Compare the various functions and roles of the government in the United
States economy, including providing public goods, defining and enforcing
property rights, correcting externalities and regulating markets,
maintaining and promoting competition in the market, protecting
consumers’ rights, and redistributing income.(E)
ECON-5.2 Analyze the roles of and relationships among economic institutions in a
market economy, including the banking system and its interaction with
business firms and consumers, the economic circular flow model, the
function of financial and securities markets, and the impact of labor
unions on the American economy. (E)
Strategies
1. Have students construct a graphic organizer in their notebooks showing each of
the three major types of businesses, a description of each, and the advantages
and disadvantages of each.
2. View and discuss a video on Bill Gates, available from A&E. Focus discussion on
those traits in Bill Gates that made him a successful entrepreneur.
3. In the computer lab use DISCUS and The Biography Resource Center to let
students do research on one successful entrepreneur. To save time, prepare a list
of entrepreneurs beforehand, but allow students suggest others. Have each
student prepare an oral presentation on his/her entrepreneur, stressing
information about the entrepreneur, the skills he/she possesses to succeed in
business, and even economic setbacks experienced by the entrepreneur.
Schedule 2-3 reports each day at the beginning of class until the reports are
finished.
Anderson School District Five 6 August 1, 2005
Economics
4. Discuss mergers, including why businesses merge and the various types of
mergers.
5. Have a student do research on a particular conglomerate or multinational and
report to the class on his/her findings.
6. Put students in small groups and have each group make a list of what believe are
the ten most powerful businesses in this country based on sales. Also have them
rank the businesses from one to ten, with one being the most powerful American
business. Have groups share their selections and use the discussion to introduce
the Fortune 500 list. Give students the top 100 on the list or more or less,
depending on your preferences.
7. Allow students to collect and share news articles about local, state, and national
businesses. Use these near the beginning of class each day.
8. As one assessment, have students write an essay on the characteristics of a
successful entrepreneur.
9. Allow students to invite local entrepreneurs to class to describe the pros and cons
of owning one’s own business.
10. While talking about corporations, show students how to read the stock market
page.(This is needed for the next unit on Personal Finance.) Bring in copies of
newspapers, put students in pairs, and let each pair make a list of at least fifty
corporations they recognize on the stock market page.
11. In groups of three to five students, have students propose a business that would
be successful in their hometown. They may not use a franchise that is already
present. In their presentation, they must include:
A. why the business would be successful.
B. where they would locate the business.
C. the number of employees needed.
D. a rough estimate of the starting costs.
E. problems the business might face.
12. As each group makes its presentation, the teacher becomes “the government,”
enforcing regulations, adding new taxes, etc. Use this as the starting point for a
discussion on government’s effect on businesses.
13. Explain to students the role of the banking industry in economic growth.
14. Complete the “Invention Convention” simulation in Economics in Action(Fourteen
Greatest Hits) available from the National council on Economic Education.
Anderson School District Five 7 August 1, 2005
Economics
Vocabulary
sole proprietorship board of directors
partnership bond
corporation merger
unlimited liability horizontal merger
limited liability vertical merger
limited life conglomerate
unlimited life multi-national
general partnership non-profit organization
limited partnership cooperative
charter service cooperative
stock producer cooperative
stockholder consumer cooperative
dividend labor union
common stock professional association
preferred stock public utility
proxy
Anderson School District Five 8 August 1, 2005
Economics
Unit 10—Personal Finance
Economics(Principles and Practices)
Chapter 12 - Life Skills section of text, pages A30-A39
Financial Fitness for Life, ( both the teacher and student guide)
available from the National Council on Economic Education.
7 Days
Indicators
ECON-4.1 Summarize types of personal economic decisions and choices that
individuals make, including determining how to budget money;
establishing short- and long term financial goals and plans related to
income, saving, and spending; utilizing loans and credit cards; and
considering investment options. (E)
ECON-4.2 Explain influences on personal economic decision making and choices,
including the effect of education, career choices, and family obligations on
future income; the influence of advertising on consumer choices; the risks
and benefits involved in short- and long-term saving and investment
strategies; and the effect of taxation and interest rates on household
consumption and savings. (E)
ECON-1.1 Illustrate the relationship between scarcity—limited resources and
unlimited human wants—and the economic choices made by individuals,
families, communities, and nations, including how families must budget
their income and expenses, how people use psychological and intellectual
resources to deal with scarcity, and how local political entities as well as
nation-states use scarce resources to satisfy human wants. (E, G)
ECON-1.2 Explain the concept of opportunity costs and how individuals, families,
communities, and nations make economic decisions on that basis,
including analyzing marginal costs and marginal benefits and assessing
how their choices may result in trade-offs. (E)
ECON-6.1 Compare the various functions and roles of the government in the United
States economy, including providing public goods, defining and enforcing
property rights, correcting externalities and regulating markets,
maintaining and promoting competition in the market, protecting
consumers’ rights, and redistributing income.(E)
Strategies
1. Have students write a one page description of their plans for saving money.
Discuss these in class and tell students that money management is a key to
financial security and success in today’s world.
2. Invite a bank representative to speak to your class about various savings plans or
conduct a seminar on savings methods yourself.
Anderson School District Five 9 August 1, 2005
Economics
3. Discuss the meaning of financial risk and tell students that they must personally
decide how much risk they are willing to assume. Rank various savings and
investment options on the board based on risk.
4. Discuss with students the difference between saving and investment.
5. Explain the difference between a stock and a bond.
6. Give students practice in computing compound interest.
7. Acquaint students with various financial newspapers and magazines such as the
Wall Street Journal, Fortune, Barron’s, and Business Week. If possible, bring
copies of these to class.
8. View and discuss the A&E video on Dow and Jones and the history of the New
York Stock Exchange.
9. Put students into 4-5 member stock market groups and take part in an investment
simulation. The Stock Market Game is an established one, and the Chicago Board
of Trade has a simulation in the futures market. If you choose, you can always
run a simulation yourself, where your students compete against each other. Give
each group $100,000 to invest. You become the groups’ broker and earn a 2%
commission on all transactions. If possible, run the game for at least 6 weeks.
10. Have stock market groups meet once each week for about thirty minutes but allow
buying and selling to take place any day. Post rankings based on total assets
every week. Award inexpensive prizes and certificates to the winning group. Only
2 teacher made worksheets are necessary for this activity: a sheet for buying and
selling, and a sheet where students assess the value of their portfolios each week.
11. Explain how to use Yahoo Finance to your students in the computer lab. This
website will probably become one of their most valuable investment
tools.(www.yahoofinance.com)
12. Have students take at least one company they invested in and make a line graph
of the price changes over the simulation time period. This could also be done for
total assets. Discuss with students what they have learned from the simulation.
13. The following lessons from Financial Fitness for Life:
A. Lessons 8-10 on saving and investment
B. Lessons 11-19 on various types of credit, consumer protection laws, and
scams
C. Lessons 20-22 on money management
These activities are involve everything from surveys to simulations to games.
There are excellent reproducible items in these lessons.
Anderson School District Five 10 August 1, 2005
Economics
14. One way to assess this learning is to give student basic information about a single
young person living on his/her own. Include take home pay, fixed expenses, and
variable expenses. Use Exercise 20.2 in Financial Fitness for Life to set up budget
categories. Bring in apartment rental booklets and newspaper want ads so
students can price apartments and cars. Allow students to ask their parents about
insurance, how much they spend on food, etc. Give students at least one week to
complete this exercise outside of class, and try to allow some time in class, too,
where you can answer questions.
15. Assist students in complete simple tax returns such as the federal 1040EZ and the
SC1040A.
Vocabulary
savings savings bond
financial intermediary treasury bill
mutual fund individual retirement account
pension over-the-counter market
risk New York Stock Exchange
coupon NASDAQ
maturity Dow Jones Average
certificate of deposit Standard and Poors
junk bond futures market
municipal bond insider trading
Anderson School District Five 11 August 1, 2005
Economics
Unit 11—Supply and Demand
Economics(Principles and Practices)
Chapters 4-7
8 Days
Indicators
ECON-2.1 Explain the law of supply and demand, including the relationships of
critical determinants (e.g., consumer income, tastes, and preferences;
technology; the price of inputs) and the effects of change on equilibrium,
price, and quantity. (E)
ECON-2.2 Explain the nature and role of competition in a market economy, including
the determination of market price through competition among buyers and
sellers and the conditions that make industries more or less competitive,
such as the effect of domestic and international competition and the
quality, quantity, and price of products. (E, G)
ECON-2.3 Explain economic incentives that lead to the efficient use of resources,
including monetary and nonmonetary incentives, the ways in which people
change their behavior in response to incentives, the relationship of
incentives to the laws of supply and demand, and the role of private
property as an incentive in conserving and improving scarce resources. (E)
ECON-2.4 Explain the effect of shortages and surpluses in a market economy,
including the effect of price controls (ceilings and floors) in causing
shortages or surpluses, changes in the price of products as a result of
surplus or shortage, and market mechanisms for eliminating shortages
and surpluses and achieving market equilibrium.(E)
ECON-6.1 Compare the various functions and roles of the government in the United
States economy, including providing public goods, defining and enforcing
property rights, correcting externalities and regulating markets,
maintaining and promoting competition in the market, protecting
consumers’ rights, and redistributing income.(E)
Strategies
1. To introduce the concept of demand, let students take part in a brief simulation.
Depending on the time of day your students are in your room, pick a food item
that students like, and ask them several questions. For example, in first period,
ask your students this: If we could get hot biscuits delivered to our classroom
door, how many would you be willing and able to buy if the price was $1.50? Get
a class total and begin to construct a demand schedule on the board. Then lower
the price to $1.00, $.75, $.50, and $.35. Each time place the class total on the
demand schedule. Use the class’s demand schedule to draw a demand curve and
introduce the Law of Demand.
Anderson School District Five 12 August 1, 2005
Economics
2. Explain the difference between change in quantity demanded and change in
demand.
3. Explain the difference between elastic and inelastic demand.
4. To explain elastic and inelastic demand using the total receipts test, use the visual
on page 103 of the text, especially section D of the visual.
5. Give students as much practice as possible in the construction of demand and
supply curves. Design teacher made worksheets or use examples from the
following sources: Teaching Strategies for High School Economics Course ,
Capstone, and Virtual Economics. All are available from the Joint Council on
Economic Education.
6. Have students make a list of things they would have bought 5 or 10 years ago but
would never buy now. Use these lists to explain change in demand.
7. Create a worksheet with 10-20 items on it such as funeral services, tomatoes,
nuclear energy, and gasoline. Have students discuss whether the demand for
each item is elastic or inelastic.
8. Introduce supply with a simulation similar to the one you used for demand. Ask
students: “If the manager of Toys-R-Us (or some other local business) called and
wanted to hire you, how many hours would you be willing and able to work if he
offered a wage of $4.00 an hour?” Get a class total and begin to construct a
supply schedule on the board. Raise the wage to $6, $9, and $13 per hour. From
this discussion and schedule, explain the Law of Supply and construct the first
supply curve.
9. Use the visuals on pages 124 and 128 of the text to explain the stages of
production and the concept of marginal analysis.
10. Use the simulation “A Market in Wheat” from Economics in Action(Fourteen
Greatest Hits) to explain the concept of equilibrium in markets as supply and
demand interact.
11. Use class discussion and supply and demand curves on the board to explain price
ceilings and floors.
12. Complete the Building Skills activity on page 159 of the text to give students more
practice in reading supply and demand curves.
Anderson School District Five 13 August 1, 2005
Economics
Vocabulary
demand elastic supply
Law of Demand inelastic supply
change in quality demanded short run
change in demand long run
substitutes marginal product
complements diminishing returns
marginal utility total cost
diminishing marginal utility fixed cost
elastic demand depreciation
inelastic demand marginal analysis
unit elastic demand marginal revenue
microeconomics market equilibrium
demand schedule surplus
demand curve shortage
supply equilibrium price
supply schedule equilibrium quantity
supply curve price floor
Law of Supply price ceiling
change in quantity supplied economics of scale
change in supply monopoly
subsidy externalities
Anderson School District Five 14 August 1, 2005
Economics
Unit 12—An Overview of the United States Economy from
a Macroeconomic point of view
Economics(Principles and Practices)
Portions of chapters 8-11 and 13-16
Days
Indicators
ECON-6.1 Compare the various functions and roles of the government in the United
States economy, including providing public goods, defining and enforcing
property rights, correcting externalities and regulating markets, maintaining
and promoting competition in the market, protecting consumers’ rights,
and redistributing income.(E)
ECON-6.2 Summarize major sources of government revenue, including taxation at the
federal, state, and local levels and tax revenues from personal income and
payroll taxes, sales taxes, and property taxes. (E)
ECON-7.1 Compare measures of economic health, including the gross domestic
product, consumer price indexes, personal income, disposable income,
rates of inflation and deflation, and unemployment rates. (E)
ECON-7.2 Explain the role of the money supply in a free-market economy, including
various forms of the money supply in the United States and the effect of
the banking system on the money supply. (E)
ECON-7.3 Explain the purposes and effects of fiscal and monetary policies, including
the structure and function of the Federal Reserve System and policies on
unemployment, inflation, and economic growth. (E)
ECON-7.4 Explain the types of goods and services that are funded with government
revenues, including national defense, road construction and repair, public
safety, health care, payments on the national debt, and education. (E, P)
ECON-7.5 Contrast the costs and benefits of the American government’s economic
policies, including how policies designed to reduce unemployment may
increase inflation and vice versa and how investment in factories,
machinery, new technology, health education, and occupational training
can raise standards of living. (E)
Strategies
1. Use the visual on page 408 of the text to describe the organization and function of
the Federal Reserve. Make a list on the board of the major powers of the Federal
Reserve. Use the chart on page 423 to summarize the tools of the Federal
Reserve.
2. Have one student prepare an oral presentation on Alan Greenspan.
3. Let a student read aloud “Fractional Reserves and Monetary Expansion” on page
419 of the text. Explain how banks “create” money and, thus, affect the economy.
Include the control of the Federal Reserve over banks in this discussion.
Anderson School District Five 15 August 1, 2005
Economics
4. Explain to the class the difference between monetary policy and fiscal policy.
5. Have students define M1 and M2 in their notebooks. Ask questions to determine
their understanding of the terms. A sample question might be, “Which is larger,
M1 or M2?” Another might be, “Which is easier for the Federal Reserve to
control?” Offer students extra credit if they can find the current amounts of M1
and M2 in the country and compare it to the amount given in the book on page
430.
6. Explain the difference between an “easy money policy” and a “tight money policy.”
7. Let students recall by looking at their notebooks all of the ways government
affects the economy. The easiest way to do this is to remind students of each unit
covered in economics. Give them a few minutes to look through their notes. List
these ways on the board.
8. Divide the class into 7 groups. Three groups will study the sources of
governmental revenue on the federal, state, and local levels respectively using
Chapter 9 of the text. The other three groups will study governmental spending on
the federal, state, and local levels using Chapter 10 of the text. The final group
will study the national debt, which is also mentioned in Chapter 10. Give each
some class time to prepare, and also allow them to work outside of class. Each
group will make a brief presentation to the class, and the class can complete
graphic organizers as the information is presented.
9. Students should define basic terms relating to economic performance in their
notebooks. Include such economic indicators as GNP, GDP, Consumer Price Index,
standard of living, personal income, disposable income, rates of inflation and
deflation, unemployment and poverty rates. Have each student choose one of
the indicators to study on the internet and present the most recent statistics to
the class. As a class, evaluate the health of the current United States economy.
10. Make a bulletin board using news articles about governmental fiscal policy.
Discuss how one economic goal can conflict with another. Allow students to
contribute other articles.
11. Use lessons 11 and 12 from Economics in Action Fourteen Greatest Hits). Both
lessons concern fiscal policy, include visuals to be used in class, and lesson 12
even has a student play for the class to present.
12. Use lesson 4 in Economics in Action (Fourteen Greatest Hits). It deals with
government’s effect on the property rights of its citizens.
Anderson School District Five 16 August 1, 2005
Economics
Vocabulary
Macroeconomics Consumer Price Index
flat money nominal GDP
Federal Reserve real GDP
monetary policy standard of living
fiscal policy recession
reserve requirements depression
easy money policy external shocks
tight money policy unemployment
moral suasion inflation
M1 deflation
M2 stagflation
GDP misery index
GNP supply side economics
national income public policy
personal income property rights
disposable income eminent domain
Anderson School District Five 17 August 1, 2005
Economics
Unit 13 - The United States in a Global Economy
Economics(Principles and Practices)
Portions of chapters 17-20
6 Days
Indicators
ECON-8.1 Explain the basic principles of international trade, including the worldwide
distribution of resources, the concept of absolute and comparative
advantages that leads to specialization and trade, and the concepts of
balance of trade and balance of payments that are used to measure
international trade. (E, G)
ECON-8.2 Summarize the outcomes of global trade, including gains made by
individuals and nations through trade, increases in consumer choice and
standard of living, and gains in production efficiency. (E, G)
ECON-8.3 Compare the effects of unrestricted and restricted trade—including those
of tariffs and quotas—on the economic and social interests of a nation-
state. (E, G)
ECON-8.4 Explain the basic concept of the foreign exchange market, including the
operation of exchange rates and the effects of the dollar’s gaining or
losing value relative to other currencies. (E)
ECON-8.5 Summarize global patterns of economic activity—including world trade
partners, the geographic features of trade, and international political
borders—and explain the impact of developing nations on the global
economy.
Strategies
1. Discuss with students this question: Is the United States able to close its doors
and stop trading with other nations?
2. Make a list on the board of what students think we export to other nations and
import from other nations. Compare this list with an actual list from the website of
the International Trade Commission or any other reliable website.
3. Have students keep a record of any goods their families buy for a week. Have
them note countries of origin. Draw conclusions about the things we buy.
4. Have students do research on the internet regarding the United States’ current
balance of trade and its major trading partners.
5. Play the game “Unequal Resources” available from Westside, where students
become members of countries that vary in their resources and economic needs.
Students learn to trade to survive. The game can be completed in about 45
minutes.
6. Complete with students the Hatfields and the McCoys Worksheet in Capstone
(older version), Unit 7, handout 3. Capstone is available from the National Council
Anderson School District Five 18 August 1, 2005
Economics
on Economic Education. This worksheet is excellent for explaining the concepts of
absolute and comparative advantage.
7. Have a debate in class over whether or not the American textile industry or any
other should be protected. Discuss barriers to international trade.
8. Help students create a graphic organizer comparing the North American Free
Trade Agreement and the proposed Central American Free Trade Agreement. Use
the internet for research.
9. While explaining flexible exchange rates, introduce students to the universal
currency converter available online. Practice converting from one currency to
another.
10. Explain the relationship between the value of the United States dollar and our
international trade.
11. Have students use the CIA World Fact Book online or other websites to examine
the trade patterns of selected countries. Make a list of some of the developed and
developing countries of the world. Discuss with students how countries can move
from one category to another.
12. Complete lessons 13 and 14 in Economics in Action(Fourteen Greatest Hits). These
lessons concern comparative and absolute advantages in trade and exchange
rates. Lesson 13 involves role-playing and lesson 14 has students taking part in an
international auction.
13. Discuss with students the effects of the European Union on international trade.
Vocabulary
trade North American Free Trade Agreement (NAFTA)
absolute advantage protectionist
comparative advantage exchange rate
tariff fixed exchange rate
quota flexible exchange rate
embargo devaluation
infant industry developing country
balance of payments developed country
balance of trade Euro
trade deficit European Union
free trade Central American Free Trade Agreement (CAFTA)
Anderson School District Five 19 August 1, 2005
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