Standards for Let’s Talk Turkey: Inflation and the Cost of Thanksgiving Dinner

Standard: 11

Name: Gross Domestic Product (GDP)

(GDP) Gross domestic product, the market value of the final goods and services produced in an economy, is the most commonly used measure of the size of the economy. Because a dollar spent is a dollar earned, GDP equals the total income for the nation.

• 6-8: At the middle school level, gross domestic product is defined and described with the caveat that it does not capture illicit and nonmarket transactions.
• 9-12: At the high school level, students are introduced to the difference between nominal and real GDP. Further limitations of real GDP as well as real GDP per capita are presented. Finally, the concept of what determines GDP in the long run is discussed.Benchmark Students will know that: Students will use this knowledge to: 11.M.1 Gross domestic product (GDP) is a measure of a nation’s economic output. It measures the total market value of all final goods and services produced in a country during some period of time, typically a year.Explain why tires produced by a domestic tire manufacturer are not counted as part of GDP when they are sold to a domestic producer of automobiles, but are counted when they are sold to domestic consumers for their family cars. 11.M.2 GDP can be computed by summing household consumption spending; investment expenditures; purchases by federal, state, and local governments; and net exports.Explain what is included in each component of GDP, and give examples. Explain why imports are subtracted in calculating GDP. 11.M.3 GDP also measures the total income earned in an economy, because when something is bought, the amount of the expenditure becomes income for the resources used to make the good.Explain how the money spent on a consumer purchase, such as a latte at a coffee shop, is distributed as income among the various resources involved in producing and serving the latte. 11.M.4 GDP per capita is GDP divided by the population of a country. It is the average income per person in an economy for a period of time.Explain how two countries with similar GDPs can have drastically different GDP per capita. Identify other countries whose GDP per capita is similar to, less than, and greater than that of the United States. 11.M.5 GDP does not always perfectly capture all production in the economy because it does not capture nonmarket or illicit market economic activities.Contrast a nonmarket activity such as stay-at-home caregiver for a child/elderly parent with a market activity such as using a daycare or nursing home to provide care. Explain why they end up being accounted for differently in GDP.M: MIDDLE SCHOOL STUDENTS National Content Standards in K–12 Economics | 43 Standard 11: Gross Domestic Product (GDP)

Standard: 16

Name: Growth and Fluctuations

Investment in factories, machinery, and technology, and in the health, education, and training of people can encourage economic growth and increase the standard of living in a country. Economic fluctuations, such as recessions, result in a temporary worsening of economic conditions as people have a harder time finding jobs and companies cut back or shut down production.

• 6-8: At the middle school level, students learn the importance of labor productivity in stimulating economic growth. Students learn what can improve labor productivity.
• 9-12: At the high school level, students learn about policies and institutions that could improve economic growth. They also learn about short-run fluctuations in the economy such as recessions and expansions.Benchmark Students will know that: Students will use this knowledge to: 16.M.1 Economic growth is a sustained increase in the quantity of the goods and services produced in a country.Research the real GDP of various countries and draw conclusions about the differences in economic growth between those countries. 16.M.2 Labor productivity is output per worker.Calculate the class’s average labor productivity after completing an activity (i.e., paper airplane production, solving calculations, jumping jacks, etc.). 16.M.3 One way an economy can grow over time is by increasing the number of workers. Another important way for an economy to grow over time is by increasing the output per worker.Perform a simple task such as making paper airplanes and then determine if more students engaged in the task will increase the production of the good or the workers’ productivity. 16.M.4 Workers can improve their labor productivity by using physical capital such as tools and machinery.Provide examples where using tools (an excavator to dig a hole, AI to write a summary of information) can increase the productivity of a worker. 16.M.5 Workers can improve their productivity when they learn new ideas or use better tools that help them perform more efficiently.Estimate the time required to complete tasks (solving a Rubik’s Cube, making an origami animal, or assembling a piece of furniture) with and without instructions. Analyze the differences and draw conclusions on how learning new methods and using tools can enhance workers’ productivity.M: MIDDLE SCHOOL STUDENTS National Content Standards in K–12 Economics | 56 Standard 16: Growth and Fluctuations

Standard: 15

Name: Inflation

Inflation is an increase in the average price level. Inflation, both expected and unexpected, imposes costs and benefits on individuals and the overall economy.

• K-5: Elementary school students learn that prices change.
• 6-8: Middle school students learn that inflation is an increase in prices, and that price indices, such as the Consumer Price Index (CPI), are used to calculate the inflation rate and how inflation impacts the purchasing power of money.
• 9-12: At the high school level, students learn how inflation impacts the purchasing power of income. In addition, some of the causes of inflation are introduced as well as the adverse effects of expected and unexpected inflation.Benchmark Students will know that: Students will use this knowledge to: 15.E.1 The prices of goods and services can increase or decrease over time.Explain why candy is more expensive now than it was 50 years ago.E: ELEMENTARY STUDENTS

Standard: 4

Name: Markets

The interaction between buyers and sellers determines the market price and allocates scarce goods and services. Buyers and sellers make decisions based, in part, on market prices.

• K-5: Elementary school students learn that markets determine the prices of goods and how people change their behavior when prices change.
• 6-8: In middle school, students are formally introduced to the concepts of supply and demand and what is meant by an equilibrium price. They are presented with a situation where the market price is not in equilibrium and learn how equilibrium is restored. Finally, they discover that a change in the price of one good can impact the market for another good.
• 9-12: In high school, students learn about shortages and surpluses, and how supply and demand changes impact the market price. Finally, the concept of the price elasticity of demand is introduced.Benchmark Students will know that: Students will use this knowledge to: 4.E.1 A market exists whenever buyers and sellers exchange goods or services.Identify items they purchased in online marketplaces and at a local market (e.g., grocery store or school fair) and describe the differences between digital and physical markets. 4.E.2 A price is what people pay when they buy a good or service, and what they receive when they sell a good or service.Identify one of their favorite items purchased with their own money and what price they paid, or what they charged when working for others (e.g., chores around the house, yard work for a neighbor). 4.E.3 Higher prices for a good or service provide incentives for buyers to purchase less of that good or service, and for producers to make or sell more of it. Lower prices for a good or service provide incentives for buyers to purchase more of that good or service, and for producers to make or sell less of it.Provide an example of a good that they did not purchase (or their parents or caregivers would not purchase for them) because it was too expensive and predict how low the price would have to drop before they would be able to buy it. Decide if they would take out the garbage, babysit a sibling, or do some other chore for $1 and, if not, decide at what price they would be willing to do the chore.E: ELEMENTARY STUDENTS National Content Standards in K–12 Economics | 20 Standard 4: Markets

Standard: 13

Name: Money

Money makes it easier to trade, borrow, save, invest, and compare the value of goods and services. Money does not need to have an intrinsic value; it derives its value from widespread acceptance in its exchange for goods and services.

• K-5: The elementary school student learns that people buy things with money instead of using barter.
• 6-8: The middle school student learns a broad definition of money as well as the functions of money.
• 9-12: The high school student learns that the money supply of a country is controlled by its central bank (which is the Federal Reserve System in the United States). The implications of too much money being supplied are discussed along with the topic of cryptocurrencies.Benchmark Students will know that: Students will use this knowledge to: 13.E.1 Money is anything widely accepted as final payment for goods and services.Identify objects that have been used as money throughout history. Explain why gold has often been used as money, while ice cream cones have never been used as money. 13.E.2 People consume goods and services, not paper money.Explain why having a suitcase full of money is practically useless if one finds themself stranded alone on a deserted island. 13.E.3 Money (notes, coins, or bank accounts) makes trading easier by replacing barter.Explain why it’s easier for a chef to buy a new jacket using money than it would be for them to barter with the tailor for the jacket.E: ELEMENTARY STUDENTS National Content Standards in K–12 Economics | 47 Standard 13: Money

Name: Spending

Standard: 2

• Students will understand that: A budget is a plan for allocating a person’s spendable income to necessary and desired goods and services. When there is sufficient money in their budget, people may decide to give money to others, save, or invest to achieve future goals. People can often improve their financial wellbeing by making well-informed spending decisions, which includes critical evaluation of price, quality, product information, and method of payment. Individual spending decisions may be influenced by financial constraints, personal preferences, unique needs, peers, and advertising.