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High School — Social Studies
Economics

Markets exist when buyers and sellers interact. This interaction determines market prices and the allocation of goods and services. As producers, consumers, savers, investors, workers and citizens in an interdependent world, we must examine the production and distribution of goods and services in order to make informed choices.

Ohio's Academic Content Standards establish the following expectations for student performance in the area of Economics:

  • Students use economic reasoning skills and knowledge of major economic concepts, issues and systems in order to make informed choices.

The content in this Teaching Tool is based on Ohio's Academic Content Standards: K-12 Social Studies and includes types of questions asked on the Ohio Graduation Test. While various activities are suggested for working with students, this Teaching Tool is designed to complement a rigorous, research-based curriculum, not to substitute for one.



Economics


1. Economics

Click on the following benchmarks for more information and for links to annotated OGT items.

a.

Benchmark A: Compare how different economic systems answer the fundamental economic questions of what goods and services to produce, how to produce them, and who will consume them.

Benchmark A: Compare how different economic systems answer the fundamental economic questions of what goods and services to produce, how to produce them, and who will consume them.

Benchmark A addresses fundamental economic questions faced by nations. Students must understand how an economic system balances the production of goods and services with consumption. Students must be able to compare different economic systems and understand how a nation attempts to manage its supply of labor and resources.

Compare different types of economies -- Students must be able to understand four types of economic systems. These four types of economies can be distinguished by private property rights, freedom of enterprise, competition and consumer choice, and the role of the government. Use the following chart in your discussions of various economies and their characteristics to help students organize their notes.

Type of Economy Private Property RightsFreedom of EnterpriseCompetition and Consumer ChoiceThe Role of GovernmentExample
Traditional Economy      
Market Economy     
Command Economy     
Mixed Economy     


Most countries have mixed economies. Students can draw conclusions about the four types of economies by answering the following questions:

  • How are the four types of economies similar?
  • How are the four types of economies different?
  • How are the four types of economies represented in the world today? Which nations or regions of the world are connected to each type of economy, and what do we know about the strength of these economies?
  • Which types of economies have led to the strongest economic power in the world today? (Ask students to determine the strength of the economy on the following factors: Which economies have a low unemployment rate, strong business investment and high gross domestic product (the market value of all final goods and services produced within a country in a given period of time)?
  • Which types of economies are currently weakest? (Ask students to make this determination based on the following factors: Which economies have a high unemployment rate, lagging economic demand, and weak business investment?)
  • What conclusions can we draw about the role of the government in influencing the strength of a nation's economy?

Click here for an annotated item from the 2005 Ohio Graduation Test that addresses this benchmark.

b.

Benchmark B: Explain how the U.S. government provides public services, redistributes income, regulates economic activity, and promotes economic growth and stability.

Benchmark B: Explain how the U.S. government provides public services, redistributes income, regulates economic activity, and promotes economic growth and stability.

Benchmark B addresses the role of the U.S. government in regulating our economy. Have students identify reasons that the government might regulate the economy. For each of the factors listed below, have students identify how and why the government might intervene:

  • Employment rate;
  • Availability of products and resources;
  • Interest rates;
  • Abusive business practices;
  • International competition;
  • Labor shortages or disputes;
  • Environmental damage;
  • Taxation;
  • Monetary policy (the role of the Federal Reserve System);
  • Crises that make aid necessary.

Consider the role of the Federal Reserve System. The Federal Reserve is the central bank of the United States. Its unique structure includes a federal government agency, the Board of Governors, in Washington, D.C., and twelve regional Reserve Banks. This structure aims to balance centralization (concentration of power under a single authority or control, such as the Federal government) with regional presence (diffusing control across various national authorities).

The Federal Reserve System uses monetary policy to control the amount of money in circulation, consequently lessening the effects of business cycles. Discuss with students how the Federal Reserve system uses such tools as changing the discount rate and buying and selling bonds on the open market.

Through class and group discussions, analyze examples of the government's public services, redistribution of income, and regulation.

Public Services: Have students consider which public services are provided by the government (such as national parks services and military protection). Students can analyze the monetary costs and relative benefits of such services and draw conclusions about why these services are necessary, by exploring the following questions:

  • Which public services are provided by the government?
  • How are these services provided?
  • Why are these services necessary?
  • What does the government and the public have to invest financially and through human labor? What are some costs for these services?
  • Why is this service helpful or useful? What are some benefits?

Redistribution of income: Have students consider the ways the government redistributes income (such as through a progressive tax, or graduated tax, a tax that is larger as a percentage of income for those with larger incomes. The term "progressive tax" is usually applied in reference to income taxes, where people with more income pay a higher percentage of it in taxes.) Students can analyze the costs and benefits of government redistribution of income and draw conclusions about the purposes that redistribution serves, by exploring the following questions:

  • What actions are taken by the government to redistribute income?
  • How are these actions carried out?
  • What purpose does this serve?
  • What do individual citizens and the government invest? What are the costs of these actions?
  • What is the impact on the individual and the greater good? What are the benefits?

Government regulations: Have students consider specific government regulations (such as regulations on banking and the financial industry) and describe how these regulations promote economic growth and stability. Consider the following:

  • Describe some examples of government regulation.
  • How do these examples of regulation promote economic growth?
  • How do these examples of regulation promote economic stability?

Click here for an annotated item from the 2005 Ohio Graduation Test that addresses this benchmark.

 



Activities

Help With Fundamentals

These activities can help you address the fundamentals of Economics with your students.

Activity 1

Understand the U.S. Economy in Comparison

Make sure students understand that the U.S. is an example of a mixed economy. Ask students to identify how our economic system frames our view of private property, freedom of enterprise, competition and consumer choice, and the overall role of the government. Compare the United States economy to another mixed economy so that students can examine various approaches.

  Private PropertyFreedom of EnterpriseCompetition and Consumer ChoiceThe Role of Government
United States    
China    


Lead students to draw generalizations about the U.S. economy by having them answer the following questions:

  • What is the role of the individual in the U.S. and Chinese economies?
  • What is the role of businesses in the U.S. and Chinese economies?
  • What is the overall role of government in the U.S. and Chinese economies?
  • How do the economic roles of individuals, businesses and the government influence each other?
  • How do the U.S. and Chinese economies determine what goods and services to produce, how they will be produced, and who will consume them?
Activity 2

Analyze the Economic Impact of Historical Events on the Role of Government in the Economy

Consider events in U.S. history that led to changes in the economy. How did these events lead to changes in the role of the government in the economy?

EventChanges in the economyChanges in the government's economic role to regulate economic activity and promote growth
The Great Depression  
World War II  




Additional Instruction and Practice

These activities may be useful for students who require additional instruction and practice with Economics.

Activity 1

Analyze How the U.S. Answers the Essential Economic Questions

Have students consider how the U.S. decides what goods and services to produce. They can work in groups, and should consider the questions listed below. Have students share the results in a whole class discussion.

How do we decide what goods and services should be produced?

  • What resources are available?
  • Which products and services are in demand?
  • Which products and services are necessary for survival? Are we able to provide all of those products and services, or do we need to import these from elsewhere?
  • What quality of life do we expect to maintain, and which products and services are necessary to maintain that quality of life?
  • Which products do we have in surplus that we can offer for trade?
  • What is our labor force qualified to produce?

How do we decide how these goods and services should be produced?

  • Who will make these products and services?
  • Which parts and services do we need to import in order to produce other particular products and services?
  • Will we create products and services by hand or by machine?
  • What resources will be necessary to make these products?
  • Who owns the methods of production?
  • How is our labor force organized?

How do we decide who should consume these goods and services?

  • Which products and services are for consumption here in our country, and which will be used for trade?
  • What is the market for these goods? Is it a market that exists or will we need to create a market? How will we create that market?
  • Which products and services do consumers need for survival? Which products and services do consumers need to maintain their lifestyle?
  • What are luxury goods and who consumes them?
Activity 2

Analyze the Costs and Benefits of Government Policies

Students can consider the costs and benefits of specific government economic policies.

First, have students identify the government's role in the economy through each of the following:

Government Policies What does the government do?What is the purpose of this policy?
Taxes   
Antitrust legislation   
Environmental regulations  


Next, have students consider the costs and benefits of each of these government policies. Discuss with students criteria for determining costs and benefits.

Government PolicyCosts BenefitsHow does this policy affect individuals? How does this policy affect businesses?
Taxes    
Antitrust legislation    
Environmental regulations    


Have students reflect:

  • Do the benefits of the regulation outweigh the costs? Why or why not?


Advanced Work

These activities can help your students reach the next level in their understanding of Economics.

Activity 1

Interpret Changes in the U.S. Economy

Because of industrialization, the U.S. moved from a market economy to more of a mixed economy. The government's increasing involvement in economic decisions moved the U.S. to a mixed economy (market and command). Have students consider the ways in which industrialization changed how the U.S. answered fundamental economic questions.

As students determine how industrialization changed the U.S. economy, have them draw conclusions about these changes by considering the following questions:

  • How did industrialization affect the U.S. economy?
    • How did industrialization change the ways we decided what to produce?
    • How did industrialization change the ways goods and services were produced?
    • How did industrialization change the ways we decided who would receive goods and services?
    • How did these changes connect to the changes in the ways people lived?
  • How did wealth, possession of wealth, and the connection between wealth and power change?
  • What other changes occurred in the methods of production in the U.S.?
  • What other changes to the methods of production might be possible in our current or future economy?

Students can defend their answers through a written essay or class presentation.

Activity 2

Evaluate Current Economic Issues and Policies Facing the U.S. Government

Have students search for information regarding current economic topics and government policies. Have students analyze these issues by identifying:

  • What characteristic of the economy does this issue/policy address?
  • What is the existing role of the government in regards to this issue/policy?
  • Will the role of the government regarding this issue/policy change? If so, how will it change?

Have students evaluate these issues/policies by asking:

  • Will government regulation increase as a result of the changes, or will it decrease?
  • How do these changes affect individuals?
  • How do these changes affect businesses?

Students can determine a position about the issue/policy that they study. Students can write a position paper in which they present their position, report on their research, and support their position with evidence from that research.