Social Studies Curriculum

Economics Framework

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Core Standards

The following information includes the key elements that will be present in any of the courses designed to meet the Anchorage School District's high school requirement in Economics. More specific objectives have been developed for each of the courses in a manner that is consistent with the content of the course but also with these 24 key standards. These standards were drawn together by the committee with grateful acknowledgment given to Economics America and the new National Content Standards in Economics.1

The items numerically are the core concepts for all ASD Economics classes. The content for the economics course options will vary but these standards are to be addressed to some extent in each of the courses. The core standards, for all courses, are listed below the appropriate concept.

ASD Core Economic Standards and Concepts

Students will understand that:

1. Scarcity and Choice
• Productive resources are limited.  Therefore, people can not have all the goods and services they want; as a result, they must choose some things and give up others.
2. Opportunity Cost and Trade-offs
• Effective decision making requires comparing the additional costs of alternatives with the additional benefits. Most choices involve doing a little more or a little less of something: few choices are "all or nothing" decisions.
3. Economic Systems
   • Different methods can be used to allocate goods and services.
   • People acting individually or collectively through government must choose which methods to use to allocate different kinds of goods and services.
   • A capitalist economic system is defined by the existence of profits, prices that are determined by the forces of supply and demand, and private property rights.
4. Economic Incentives
   • People respond predictably to positive and negative incentives.
   • Profit is an important incentive that leads entrepreneurs to accept the risks of business failures.
5. Economic Institutions
   • Institutions evolve in market economies to help individuals and groups accomplish their goals. Banks, labor unions, corporations, legal systems, and not-for-profit organizations are examples of important institutions.
6. Exchange, Money, and Interdependence
• Voluntary exchange occurs only when all participating parties expect to gain. This is true for trade among individuals or organizations within a nation, and usually among individuals or organizations in different nations.
• Money makes it easier to trade, borrow, save, invest, and compare the value of goods and services.

Microeconomic Concepts

7. Markets and Prices
   • Markets exist when buyers and sellers interact. This interaction determines market prices and thereby allocates scarce goods and services.
8. Supply and Demand
   • Prices send signals and provide incentives to buyers and sellers.
   • When supply or demand changes, market prices adjust, affecting incentives.
9. Competition and Market Structure
   • Competition among sellers lowers costs and prices and encourages producers to produce more of 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.
10. Income Distribution
    • Money makes it easier to trade, borrow, save, invest, and compare the value of goods and services.
    • Income for most people is determined by the market value of the productive resources they sell.
    • What workers earn depends, primarily, on the market value of what they produce and how productive they are.
11. Market Failures
    • Market failure occur when there is inadequate competition, lack of access to reliable information, resource immobility, externalities, and the need for public goods. An example of market failure is pollution.
12. Role of Government
    • 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 schools, transportation, national defense, and address environmental concerns, define and protect property rights, and attempt to make markets more competitive. Most government policies also redistribute income.
    • 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.

Macroeconomic Concepts

13. Gross Domestic Product
    • GDP is a measure of the total dollar amount of final goods and services produced in the domestic economy in one year. It is the sum of personal consumption, government spending, business investment and net exports.
14. Aggregate Supply and Aggregate Demand
    • A nation's overall level 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.
15. Unemployment
    • Unemployment imposes costs on individuals and nations.
    • The unemployment rate is the number of people who are unemployed expressed as a percentage of the labor force. Significant unemployment implies that the nation is not using its scarce resources as efficiently as possible.
16. Inflation and Deflation
    • Inflation is a sustained increase in the general level of prices, while deflation is a sustained decrease in the general level of prices.
    • Unexpected inflation or deflation imposes costs on many people and benefits some others because it arbitrarily redistributes purchasing power.
    • Price instability can reduce the rate of growth of national living standards because individuals and organizations use resources to protect themselves against the uncertainty of future prices.
17. Saving and Investment
    • 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.
18. Monetary Policy
    • Monetary policy influences the overall level of employment, output and prices.
    • Monetary policy in the United States is conducted by the Federal Reserve System, the nation's central bank.
19. Fiscal Policy
    • Federal government budgetary policy influences the overall levels of employment, output, and prices.
    • Fiscal policy: taxation and government spending decisions made by the Executive and Legislative branches influence the overall levels of employment, output and prices.
20. Productivity
    • Investment in factories, machinery, new technology, and in the health, education, and training of people can raise productivity and future standards of living.
21. Economic Growth
    • Economic growth is a sustained rise in the production of goods and services.
    • Economic growth is the result of an increase in the stock of resources and improvements in the technology and human capital.

International Economic Concepts

22. Absolute and Comparative Advantage and Barriers to Trade
    • 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.
    • International trade results in increased global intradependence.
23. Exchange Rates and the Balance of Payments
    • The exchange rate between two nations' currencies is determined by their balance of trade in goods, services, and assets.
    • Exchange rates are also affected by expectations regarding price levels in various countries.
24. International Aspects of Economic Development
    • Economic development is a sustained expansion of a nation's standard of living.
    • Differences in the level of economic development between nations are determined by each nation's government policies, institutions and utilization of resources.
      

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