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Unit VIII – The American Economy

      EOC PREP

Competency Goal 8: The learner will analyze features of the economic system of the United States.

Generalizations

• Factors such as, free enterprise, competition, private ownership of resources and government regulation of business can have a negative
or positive impact on the U.S. economy.
• Promoting free enterprise while protecting consumers may influence the policies of the U.S. government which may require government
intervention in business.
• Increases or decreases in the supply and demand of goods may impact US consumers and producers.

Objectives

8.01 Compare characteristics of command, market, traditional, and mixed economies.

Essential Questions

• How does a market economy protect consumers?
• What are the advantages and disadvantages to consumers when the government intervenes in the economy?
• Why might a nation choose one economic system over another?

Macro Concepts

Systems

Micro Concepts

Economic Systems
Basic Economic Questions

Factual Content

Economic Systems)
Market economy
Mixed Market economy
Mixed economy
Command economy
Traditional economy
(Basic Economic
Questions)
What to Produce?
How to Produce It?
How Much to
Produce?
For Whom To
Produce It?

8.02 Describe how the free enterprise system encourages private ownership of property and promote individual initiative.

Essential Questions

• Why is the private ownership of resources a vital part of the free enterprise system?
• What roles do security and freedom play in the free enterprise system?
• How does the government protect individual initiative and what are the advantages and disadvantages of these protections?

Macro Concepts

Power
Systems

Micro Concepts

Economic Systems
Mixed Market
Free Enterprise
Political Action
Entrepreneurship

Factual Content

Mixed Market)
Private property
Voluntary exchange
Patents
Copyrights
Productivity
Specialization
Division of Labor
Efficiency
(Free Enterprise)
Goals for Free
Enterprise
Security
Equity
Freedom
Full employment


8.03 Explain the circular flow of economic activities and how interactions determine the prices of goods and services.

Essential Questions

• How would a disruption in any segment of the circular flow of economic activity impact the other parts?
• How does the capitalist system of economic exchange promote economic interdependence?
• What impact does government regulation have on the circular flow model?

Macro Concepts

Systems

Micro Concepts

Economic Activity
Economic Exchange Markets

Factual Content

Markets)
Factor Market
(household)
Product Market
(business)
(Economic
Activity/Exchange)
Circular flow model
Wages
Salary
Economic interdependence

8.04 Illustrate how supply and demand affects prices.

Essential Questions

• How does the government affect supply and demand schedules in the U.S. economy?
• Why do consumers choose substitute goods and how these goods impact price?
• What factors affect a household’s disposable income?

Macro Concepts

Patterns
Influence

Micro Concepts

Markets
Economic Exchange
Demand
Supply
Price

Factual Content

Demand)
Demand Curve
Demand schedule
(Supply)
Supply curve
Supply schedule
Equilibrium/Market
price
(Influences on
Supply/Demand)
Personal income
Disposal income
Complimentary goods
Substitute goods

8.05 Predict how prices change when there is either a shortage or surplus.

Essential Questions

• What are the advantages and disadvantages of wage and price controls and what affect do they have on the economy?
• How do consumers and markets react to both shortages and surpluses?
• What role does the government play when either a shortage or surplus of goods and services exists?

Macro Concepts

Change
Influence
Patterns

Micro Concepts

Price Change

Factual Content

Price Change)
Surplus
Shortage
Consumer Tastes
Minimum wage
Inflation
Deflation
Wage and price control
Interest rates

8.06 Explain how changes in the level of competition can affect price and output levels.

Essential Questions

• Why is competition good for consumers?
• What impact can the government have on competition and how does its influence affect both consumers and producers?
• What are the advantages and disadvantages of a globally competitive market for consumers and domestic companies?

Macro Concepts

Change
Power
Influence

Micro Concepts

Competition
Markets
Price
Globalization

Factual Content

(Markets/Competition)
Buyers and sellers
Monopoly
Oligopoly
Competitive market
Mergers
Horizontal merger
Vertical merger
Conglomerates
(Globalization)
Multinational
Conglomerates

8.07 Identify and describe the roles and functions of various economic institutions and business organizations.

Essential Questions

• What role does organized labor play in protecting workers and how does it impact prices and consumers?
• How does the government protect consumers and small businesses and ensure fair competition?
• How do sole proprietorships contribute to the spirit of the United States’ economic system?

Macro Concepts

Systems
Power

Micro Concepts

Economic Factors
Business Model
Organized Labor
Political Action

Factual Content

(Types of Business)
Sole proprietorship
Unlimited liability
Limited life
Small Business
Administration
(SBA)
Partnership
Corporation
Limited liability
Unlimited life
Stock, Stock market
Dividend
Bond
Cooperative
Franchise
(Organized Labor)
Labor Union
Craft Union
Industrial Union
Collective bargaining
Mediation
Arbitration
Lockout
Strike
(Political Action)
Social Security Act of 1935
Nat’l Labor Relations Act, 1935
Fair Labor Standards Act, 1938
Taft-Hartley Act, 1947
Anti-trust Laws

8.08 Evaluate the investment decisions made by individuals, businesses, and the government.

Essential Questions

• How does fiscal policy impact investment decisions made by individuals and businesses?
• How does the U.S. economic system allow for individual freedom and economic security?
• What impact does investment by businesses and the government have on prices and consumers?

Macro Concepts

Systems
Protection

Micro Concepts

Investment
Personal Finance
Banking System
Insurance
Personal Financial Literacy

Factual Content

(Investment)
Mutual Funds
Investment spending
Capital investment
Pension funds
Mutual funds
Reserve requirement
(Banking System)
Time deposit
Demand deposit
Credit cards
Debit cards
Commercial Bank
Savings & Loan
Associations
Credit Unions
Federal Deposit
Insurance Commission
(FDIC)
(Types of Insurance)
Life
Medical
Comprehension
Liability

Objective 8.09: Describe the role of money in trading, borrowing, and investing.

Essential Questions

• What ensures the value of the American dollar and how does its value impact prices, international trade, and investment decisions?
• What impact does credit have on individual and businesses?
• How might the overuse of credit affect a consumer?

Macro Concepts

Exchange
Systems

Micro Concepts

Economic Exchange
Money
Investment
Personal Financial
Literacy

Factual Content

(Economic Exchange)
Coins
Currency
Checks
Legal tender
(Functions of money)
Medium of exchange
Collateral
Credit
Barter
Investment
Interest Rates

Supplemental Readings

An Outline of the U.S. Economy