Middle Level Social Studies (Grades 5–8) Subtest 2

Subarea III. Economics

0020

Understand basic economic concepts and terms, microeconomics, and consumer economics and personal finance.

recognizing and applying basic economic concepts and terms (e.g., scarcity, opportunity cost, productivity, division of labor)
comparing basic characteristics of market, traditional, command, and mixed economic systems and examining how values and beliefs influence economic decisions in diverse societies
demonstrating knowledge of the factors of production (i.e., land, labor, capital, and entrepreneurship) and the different ways in which income is earned in market economies (e.g., wages and salary, rent, interest, profit)
recognizing how supply and demand, prices, incentives, and competition function in a market economy
demonstrating knowledge of basic forms of business organization and examining strategies for organizing the production, marketing, and distribution of goods and services
recognizing basic principles of consumer economics and applying principles of economic decision making
demonstrating knowledge of personal finance, budgeting, credit, savings, and investment

0021

Understand macroeconomics and international economics.

recognizing the roles of and relationships among major economic institutions and groups in the U.S. economic system (e.g., households, business firms, banks, corporations)
analyzing the causes and effects of unemployment, inflation, and deflation
demonstrating knowledge of the business cycle and concepts used to measure the national economy
examining how fiscal policy influences economic activity and assessing the costs and benefits to society of allocating goods and services through private and public sectors
identifying the functions of the Federal Reserve System and analyzing the role of monetary policy in the U.S. economy
demonstrating knowledge of different forms of government regulation and their effects on consumers and producers
examining the basic principles and components of international economics and analyzing factors influencing the operation of the international economic system