Standards for Fiscal Ship Through the Lens of the Elections

Standard: 2

Name: Decision Making

People usually respond predictably to positive and negative incentives. Effective decision-making requires comparing the additional costs of alternatives with the additional benefits.

• K-5: In elementary school, students learn about the benefits and costs of making choices. They learn how positive and negative incentives influence their choices and behaviors, and how different people can make different choices given the same circumstances.
• 6-8: In middle school, the presentation of decision-making is refined by adding the ideas of marginal cost and marginal benefit. Students learn that decisions are made by comparing the marginal cost and the marginal benefit of doing something. Finally, they learn that monetary and non- monetary incentives exist and that decisions may have long- term consequences.
• 9-12: In high school, the scope of decision-making is expanded to include the various roles that individuals play in the economy as well as other decision-makers such as firms and governments. Caveats to decision-making such as unintended consequences, the costs and benefits of an allocation system, and sunk costs are covered. Finally, basic behavioral economics findings are introduced to illustrate examples where individuals may not make the best decisions.Benchmark Students will know that: Students will use this knowledge to: 2.E.1 Because of scarcity, something is given up whenever a choice is made.From a list of three toys, rank order their preferences, state their first choice, and identify the second toy as what is given up. 2.E.2 A cost is what you give up when you decide to do something. A benefit is the gain a person receives when they decide to do something.List the costs (what you give up) and benefits (what you gain) of buying a pet. 2.E.3 The opportunity cost of an activity is the value of the best alternative that would have been chosen instead. It includes what would have been done with the money spent, the time, and other resources used in undertaking the activity.Describe a situation that requires a choice among several alternatives. Decide which they would choose and then identify the opportunity cost of that decision. 2.E.4 The evaluation of choices and opportunity costs is subjective; such evaluations vary depending on individual preferences, cultural backgrounds, and societal norms.Compare solutions to a common problem, such as where to go on a class trip, and explain why solutions and opportunity costs differ among students. 2.E.5 Many choices involve doing a little more or a little less of something; few choices are “all-or-nothing” decisions.Decide how the school should spend $4,800 to buy new playground equipment. Their class voted and would like to buy four swing sets ($1,200 each), three slides ($1,200 each), and three jungle gyms ($600 each). Explain what they must give up to get more of some and less of other equipment.E: ELEMENTARY STUDENTS National Content Standards in K–12 Economics | 12 Standard 2: Decision-Making

Standard: 18

Name: Fiscal Policy and Taxation

Fiscal policy refers to government taxation and spending decisions. The federal government’s budget policy influences the overall levels of employment, output, and prices. Taxation impacts the behaviors and circumstances of individuals and businesses.

• 6-8: Middle school students learn the sources of government revenues and how those revenues are spent.
• 9-12: High school students learn about how changes in fiscal policy affect the spending of consumers and producers and therefore influence the economy. Various types of taxes are introduced as well as the concept of tax progressivity. Finally, the funding of federal budget deficits is described.Benchmark Students will know that: Students will use this knowledge to: 18.M.1 Most federal government tax revenue comes from personal income and payroll taxes. Additional revenue sources include corporate taxes, excise taxes, and other taxes.Use U.S. federal budget data from the Congressional Budget Office to construct a pie chart depicting major categories of federal revenue and discuss why most revenue comes from income and payroll taxes. Explain why federal tax revenues increase when the economy expands. 18.M.2 Payments to Social Security recipients, the costs of national defense and homeland security, medical expenditures (such as Medicare), transfers to state and local governments, and interest payments on the national debt constitute the bulk of federal government spending.Use data from the U.S. federal budget to construct a pie chart depicting the major categories of federal expenditures. Explain why federal government expenditures decrease when the economy expands. 18.M.3 Although the sources of revenue vary greatly by state, typical sources of state and local government revenues include sales taxes, grants from the federal government, personal income taxes, and property taxes.Identify the various sources of state and local revenues and various categories of state and local expenditures in their state. 18.M.4 The bulk of state and local government revenue is spent on education, public welfare (including hospitals and health), road construction and repair, and public safety.Describe local government services that are used by the residents of their community and explain where the funds come from to pay for those services.M: MIDDLE SCHOOL STUDENTS National Content Standards in K–12 Economics | 61 Standard 18: Fiscal Policy and Taxation

Standard: 17

Name: Monetary Policy

Monetary policy refers to interest rate and money supply decisions made by a central bank. In the United States, the Federal Reserve uses monetary policy to promote maximum employment and a low, stable rate of inflation.

• 6-8: Middle school students learn that the Federal Reserve is the central bank of the United States and are introduced to the goals of the Federal Reserve.
• 9-12: High school students learn about the composition of the Federal Reserve. They then learn about how monetary policy is implemented and how a change in the federal funds rate can impact the economy.Benchmark Students will know that: Students will use this knowledge to: 17.M.1 The Federal Reserve is the central bank of the United States. A country’s central bank oversees and regulates the banking system and sets monetary policy to promote a healthy economy.Explain how a central bank provides benefits for citizens, the banking system, and the economy overall. 17.M.2 Monetary policy is the actions taken by a central bank that influence interest rates and overall financial conditions in an economy.Discuss how changes in interest rates affect a business’s or individual’s decision whether to save or invest. 17.M.3 The Federal Reserve has a dual mandate from the U.S. Congress to promote maximum employment and price stability in the U.S. economy.Explain why both maximum employment and price stability are important to consumers, producers, and the economy overall.

Standard: 7

Name: Role of Government

Governments intervene in markets for a variety of economic reasons, including improving competition; providing public goods, like national defense; controlling pollution; defining and enforcing property rights; and helping those in need.

• K-5: Elementary school students learn that governments tax or borrow money to pay for goods and services that they provide to society.
• 6-8: Middle school students learn that taxes or subsidies might affect the output of goods and services.
• 9-12: High school students learn that governments pursue different economic goals and that policymaking often requires trade-offs among the goals. High schoolers are given examples of how government policies are used to encourage competitive markets, and how governments can correct for externalities or public goods. Finally, students learn that governments may pursue goals other than correcting inefficiencies, for example, redistributing income. The impact of economic policies is then examined, noting that sometimes the cost of an intervention may exceed the benefits, and those who construct policies may not be incentivized to create optimal policies.Benchmark Students will know that: Students will use this knowledge to: 7.E.1 Governments often provide certain kinds of goods and services in a market economy.Brainstorm a list of goods and services (such as police protection, upkeep of roads, parks, etc.) not usually privately produced. 7.E.2 Governments pay for the goods and services they use or provide by taxing or borrowing.Explain how a local school district would raise the money to pay for a new elementary school.E: ELEMENTARY STUDENTS

Standard: 1

Name: Scarcity and Allocation

Productive resources are limited. Therefore, people must choose which goods and services they want and which to forego, and they must also select a method for how to allocate these goods and services.

• K-5: Elementary students are introduced to wants and how goods and services satisfy those wants. The four types of resources are defined, with entrepreneurship included as a resource. Students are introduced to the concept of scarcity. They learn that due to scarcity, they cannot have everything they want and therefore, decisions need to be made in some manner.
• 6-8: Middle school students delve more deeply into the concept of scarcity and the implication of scarcity in terms of the types of choices that scarcity forces society to make. The different types of economic systems societies might use are presented.
• 9-12: High school students are given criteria by which to judge economic systems and policies and are introduced to how scarcity of resources leads to a trade-off between the goods a country produces.Benchmark Students will know that: Students will use this knowledge to: 1.E.1 Economic wants are desires that can be satisfied by consuming a good (an object) or a service (an action).Match a list of wants with the correct example of a good or service that satisfies each want. 1.E.2 Goods are things that people use to satisfy their wants. People can touch, see, consume, or play with goods. Services are things that people do for other people.Identify examples of goods used in the classroom; identify the service provided by a teacher, hair stylist, mechanic, or other producers in the community. 1.E.3 Producers are people who make or grow goods and provide services. Consumers are people who buy or use goods and services.Identify people who are consumers and give examples of goods or services they use or buy. Identify people who are producers and give examples of goods and services they make or grow. Give examples of when they have been consumers and producers. 1.E.4 Productive resources are the capital resources, natural resources, and human resources available to make goods and services. Entrepreneurs combine resources to create new businesses and, therefore, are considered a separate productive resource.Identify the resources required to begin a business the student would like to own, making sure to include each category of resources. 1.E.5 Capital resources are goods that are produced and used to make other goods and services. They can be used over and over again in the production process. They are also called capital goods or physical capital.Draw a picture representing a capital resource used at school. Identify examples of capital resources used to produce a good or service in their community.E: ELEMENTARY STUDENTSThe Standards and Benchmarks Notes: The standard is found at the top of each section. The standard is followed by a narrative on how the standard is designed, in other words, the guiding ideas behind the benchmarks for each level. Benchmarks are provided for three levels: elementary, middle, and high school. The benchmarks do not provide a specific grade level; that determination should be done by local teachers, schools, and districts. The final determination of grade level will vary depending on the students as well as the overall design of the school or district plans. National Content Standards in K–12 Economics | 8 Standard 1: Scarcity and Allocation