Integrating Social Studies

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Integrating Social Studies Economics

• Its Not Rocket Science
• February 8, 2005

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Goals for the Day

• Uncover the Social Studies Economic Standards in
  plain talk
• Develop plans to implement the concept into
  social studies content
• Develop economic literacy
• Have Fun

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Format

• Discuss a standard
• Planning time - see the worksheet
• Move to the next standard
• Create our own economy - you are the producers
  and consumers
• Conduct auctions
• Keep track of prices and the money supply

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Format

• Planning each standard is important for each
  grade level
• Standards below your grade level form the
  foundation - this should be practiced and
  reinforced
• Standards above your grade level help you get the
  students to the target

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What does it mean that

• Post any questions you have about content on the
  sheet at the front
• It may be part of the content for the day
• It may be something that we can address to the
  group for an answer

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Economics Standards

• 1.6 Students will identify basic economic
  concepts
• 4.8 Students will describe characteristics of a
  market economic system and the interactions of
  consumers and producers. STAR
• 4.9 Students will demonstrate an understanding of
  money and the financial system used in the United
  States.
• 5.3.1 Students will explain the structure and
  operation of the United States economy and the
  role of citizens as producers and consumers. STAR

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Economics Standards

• 8.3.5 Students will explain the structure and
  operation of the United States economy and the
  role of citizens as producers and consumers.
• 8.3.6 Students will compare the United States
  economic system to systems in other countries.
  STAR

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Economics Standards

• 12.3.13 Students will examine the basic economic
  indicators and fundamentals of international
  trade. STAR

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Basic Economic Principles

• Unlimited wants- Satisfied by
• Goods - objects
• Services - actions
• Limited resources
• Economics the study of how people try to satisfy
  unlimited wants with limited resources
• Scarcity all resources are limited

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Basic Economic Principles 1.6

• People choose
• Choices have costs (they may lie in the future)
• Costs what people have to give up - monetary and
  non-monetary
• Opportunity Cost the next best choice that is
  given up- example
• All economic decisions involve opportunity costs

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Decision Making

• Why does someone quit?
• Why do college athletes go professional early?
• Cost-Benefit - always weighed
• Benefit gt Cost Rational - examples
• Benefit lt Cost Irrational - examples

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Planning

• Plan how these concepts would be
  taught/reinforced in your content
• Fill out the planning chart
• Share

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4th Grade Standard

• Students will describe characteristics of a
  market economic system and the interactions of
  consumers and producers. 4.8 STAR

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Producers

• Seller side of the market - produce goods and
  services
• Take some resources and add value
• Resources
• Land- gifts of nature
• Labor - human resources
• Capital - man made resources - equipment
• The production process is one of adding value-
  what about a Big Mac?

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Consumers

• Buyer side of the market - consume goods and
  services to satisfy wants
• End of the line
• Consumers use up the value - to consume
• What if you order the Big Mac and a kid steps up
  and takes a bite? How much of the value has been
  consumed?
• Most people act as both producers and consumers

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Markets

• Interaction between buyers and sellers
• Buyers - demand
• Sellers - supply
• Types of markets
• Formal - examples
• Informal - examples

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Markets

• The interaction between buyers and sellers
  determines the price
• This is how scarce goods and services are
  allocated - or who gets them?
• Time for an auction!!!

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Shortage and Surplus

• Shortage Demand gt Supply
• Surplus Demand lt Supply
• The market price will adjust through the buyers
  and the sellers so Demand Supply the market
  clears
• This is called equilibrium
• Is there a wrong price?

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Adam Smith

• Wrote The Wealth of Nations in 1776
• Examined the economic activity in England
• Self interest the system works when everyone is
  working to meet their own interests
• Why do you and the clerk say thank you?
• The invisible hand the economy is driven by the
  interaction between the buyers and sellers

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Market Systems

• Free enterprise the owners assume the risks and
  receive the benefits (profits)
• Laissez Faire Hands Off
• The government should engage in those activities
  that cant be provided at a profit
• What things do we need that cant be provided at
  a profit?

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Planning

• Plan how these concepts would be
  taught/reinforced in your content
• Fill out the planning chart
• Share
• Auction

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5th Grade Standard

• 5.3.1 By the end of fifth grade students will
  explain the structure and operation of the United
  States economy and the role of citizens as
  producers and consumers.

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Functions of Money

• Medium of exchange
• Store of value
• Unit of accounting
• What makes our money valuable?
• Why dont we use fish?

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Kinds of Money

• Currency
• Coin, paper currency
• Largest denomination printed - 100
• US has never devalued currency - if you have a
  10,000 bill it will be accepted and shredded at
  the nearest Federal Reserve Bank
• Demand Deposits - like checking accounts
• Is a credit card money?

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Money Supply

• M1 - Currency, coin and demand deposits
• M2 - M1 plus time deposits less than 100K
• M3- M2 plus time deposits over 100K
• M1 is considered the money supply
• Is our currency money?
• What is our money supply?

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Savings

• Opportunity cost of holding money is to give up
  purchases today for purchases in the future
• Benefit is purchases in the future and the
  earnings from interest
• Savings allows others to use the money on credit
  - they pay an interest rate

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Credit

• The price of using borrowed money is an interest
  rate
• Loanable funds rate - what your bank charges
• Federal Funds rate - what banks charge each other
  - this target is set by the Federal Reserve Open
  Market Committee - this is what it means when the
  fed raised or lowered interest rates
• How does the Federal Funds rate affect the
  economy?

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Resources

• Land - paid for by rent
• Labor - paid for by wages
• Capital - paid for by interest (not the same as
  credit)
• Producers pay rent, wages and interest to
  individuals (who are also consumers) to add value
• Consumers pay the producers for the finished
  goods and services

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Circular Flow
Rent, Wages, Interest

• Producers

• Consumers

Payments for Goods and Services
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Planning

• Plan how these concepts would be
  taught/reinforced in your content
• Fill out the planning chart
• Share
• Auction

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8th Grade Standard

• Students will compare the United States economic
  system to systems in other countries. 8.3.6 STAR

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Basic Economic Questions

• What to produce?
• How to produce?
• For whom to produce?
• Each economy has to determine how to answer the
  three questions

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Types of Economies

• Traditional answered by culture and tradition -
  examples
• Command answered by the government - examples
• Market answered by the buyers and sellers
• Mixed U.S. has components of all three -
  examples

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Public vs Private

• What things are provided by the government
  public goods? Why?
• What things are better provided by the market
  (privately)? Why?
• Give examples of each that have gone well, and
  others that have gone bad

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Planning

• Plan how these concepts would be
  taught/reinforced in your content
• Fill out the planning chart
• Share
• Auction

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12th Grade Standard

• 12.3.13 Students will examine the basic economic
  indicators and fundamentals of international
  trade. STAR

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Economic Indicators

• How healthy is the economy?
• GDP, Unemployment, and Inflation
• Gross Domestic Product the value of the goods
  and services produced within the borders of a
  country in one year
• Only new sales - re-sales dont count
• U.S. GDP about 7 trillion

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Economic Indicators

• Unemployment people over the age of 16 actively
  seeking work that cant find it
• Unemployment rate (unemployed/civilian labor
  force) X 100
• Bureau of Labor Statistics conducts monthly
  surveys to determine the rate Dec 2004 5.4

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Unemployment

• Unemployment rate underestimates true
  unemployment
• One hour per week is employed
• Doesnt account for underemployment
• Discouraged workers may leave the labor force and
  arent counted
• Whats the relationship between unemployment and
  GDP?

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Inflation

• Rise of prices over time - its natural
• People need to be able to predict how much prices
  will be in the future in order to plan spending
• Consumer Price Index - products purchased by
  consumers is indexed and we see the percentage
  increase
• What is our rate of inflation?
• What is the relationship between inflation and
  unemployment?

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Planning

• Plan how these concepts would be
  taught/reinforced in your content
• Fill out the planning chart
• Share
• Auction

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International Trade

• Why do we trade?
• Imports things we buy from other countries
• Exports things we sell to other countries
• Trade Deficit Imports gt Exports
• Why does a rich country have a trade deficit?
• Specialization Cant Bill Gates answer the phone?

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Trade Model

• Two Countries
• Two goods
• Specialization

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Protectionism

• Trade barriers are used to protect domestic jobs
  and are a benefit to producers and a cost to
  consumers
• U.S. is the largest free trade zone in the world

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Trade Barriers

• Tariffs a tax on imports
• Drives up the price of the goods - consumers pay
  more
• Money goes to domestic industry, foreign
  industry and the government

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Trade Barriers

• Quotas a limit on imports
• Drives up the price of the goods - consumers pay
  more
• Money goes to domestic industry, foreign
  industry - what about the government?
• Which one have we used more- tariffs or quotas?
  Why?
• Should we Buy American, Save an American Job?

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Planning

• Plan how these concepts would be
  taught/reinforced in your content
• Fill out the planning chart
• Share
• Auction

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Web Sites

• http//ecedweb.unomaha.edu
• http//www.ncee.net
• http//www.moneyfactory.com
• http//www.kc.frb.org
• http//practicalmoneyskills.com
• http//www.econedlink.org
• http//www.handsonbanking.org
• http//www.irs.gov/app/understandingTaxes
• http//www.nbr.org