MICHIGAN
TEST OBJECTIVES
FIELD 607: ECONOMICS

Social Studies Skills and Citizenship
United States Free Enterprise System
International Economics
Consumer Economics

SOCIAL STUDIES SKILLS AND CITIZENSHIP

Understand the structure and functions of the United States government.

Includes basic underlying principles, basic economic functions, and basic structures and components of the United States government.

Understand the forces that determine the beliefs and values of individuals and groups.

Includes the relationship of societal values to individual beliefs and attitudes; and the nature of interaction among individuals, groups, and cultures in determining beliefs and attitudes.

Identify the basic rights and responsibilities of United States citizenship.

Includes legal rights and protections, personal responsibilities, and constitutional provisions affecting economic rights and responsibilities.

Understand characteristics of United States society and culture.

Includes basic characteristics and values of United States society; ethnic cultures and their effect on United States society; and the effects of social movements and reform on economics in the United States.

Apply procedures for locating and gathering information.

Includes selecting and using appropriate reference sources; and note taking skills.

Apply procedures for translating, synthesizing, and organizing information.

Includes interpreting, synthesizing, and organizing information in various forms; and categorizing data.

Apply critical thinking skills.

Includes drawing conclusions from stated information; evaluating sources of information; and assessing the validity of conclusions.

Apply problem-solving, decision-making, and research skills.

Includes steps for solving problems; and research methods or models for solving problems.

UNITED STATES FREE ENTERPRISE SYSTEM

Identify basic terms and concepts (e.g., scarcity) associated with economics.

Includes basic economics terms and concepts.

Understand basic characteristics and goals of the United States free enterprise system.

Includes characteristics of a market model; characteristics of the United States economic system; the roles, characteristics, and influence of incentives; and the roles, characteristics, and benefits of competition.

Understand the principles of supply and demand.

Includes characteristics, principles, and factors determining supply and demand; and the effects of changes in supply and demand on equilibrium price and quantity.

Understand principles of exchange, distribution, and circular flow.

Includes principles, roles, and mechanisms of voluntary exchange; the relationships among the price mechanism, allocation of resources, and distribution of income; the factors of production and income earned from factors of production; and relationships among the components of the circular flow model of economic activity.

Understand the business cycle (include inflation and deflation).

Includes characteristics and phases of the business cycle; aggregate measures of economic activity and their meaning; and causes, characteristics, and effects of inflation, deflation, and changes in the level of employment.

Understand principles of production and pricing in the United States economy.

Includes capital goods and consumer goods; the law of diminishing returns; and elements that determine the production of specific goods and services.

Analyze economic data and graphics.

Includes interpreting and comparing data presented in various forms.

Demonstrate knowledge of the labor resource in the United States economic system.

Includes the effects of specialization and division of labor; the effects of changes in economic conditions on the labor market; and the structure and role of labor unions in the development of the United States economic system.

Analyze the role of business in the United States economic system.

Includes characteristics of and pricing mechanisms within various types of markets and their effects on the United States economic system; and the types, characteristics, and roles of various types of business organizations.

Demonstrate knowledge of money.

Includes general characteristics and functions of money; elements of the money supply; and the process by which the money supply expands or contracts.

Demonstrate knowledge of financial institutions.

Includes types, characteristics, and functions of various financial institutions; and the types, characteristics, and roles of securities markets.

Understand the Federal Reserve System.

Includes the structure, functions, and powers of the Federal Reserve System; basic principles of monetary policy and its effects on elements of the United States economic system; the means by which the Federal Reserve controls the money supply; and the effects of changes in the supply of money on inflation and deflation.

Understand principles of government intervention and its effect on the economy.

Includes the role of government in achieving economic goals; government controls and agencies designed to regulate elements of the economic system; and costs and benefits associated with governmental intervention in the market.

Understand taxation.

Includes types and characteristics of taxes; the principle, structure, and function of federal taxes; and major types of taxes imposed by state and local governments.

Demonstrate knowledge of government spending.

Includes major expenditure categories used by federal, state, and local governments; and the effects of government spending on the United States economy.

Understand fiscal policy and its effects on the economy.

Includes the role of United States fiscal policy; considerations and procedures that determine and limit tax and spending decisions; the effects of fiscal policy and the national budget on elements of the economic system; and causes and potential effects of a large national debt.

Understand the economic history of Michigan.

Includes geographic influences and the effects of science and technology on the economic development of Michigan; the roles of farming and major industries in the economic development of Michigan; and geographic and economic influences on the demographic development of Michigan.

Understand regional characteristics of the Michigan economy.

Includes major economic resources and industries; and economic growth trends in regions of Michigan.

Analyze production in contemporary Michigan.

Includes major factors of production and their characteristics; and the roles of farming and manufacturing in the contemporary Michigan economy.

Demonstrate knowledge of income distribution and socioeconomic characteristics of Michigan.

Includes characteristics, causes, and effects of income distribution patterns; and standards of living in regions and among populations of Michigan.

Understand the role of the state government in the Michigan economy.

Includes elements and effects of state control and regulation; laws and principles related to labor and trade; the role of state taxes and fiscal policy; and the economic interdependence between Michigan and other states and nations.

INTERNATIONAL ECONOMICS

Understand world trade and its effects on the United States economy.

Includes the principles of balance of trade and comparative/absolute advantage in the context of international economic relations; the effects of tariffs and other protectionist measures on the United States economy; types and characteristics of United States trade agreements with other nations and groups of nations; and effects of international trade on the United States economy and its consumers.

Understand world finance and its effects on the United States economy.

Includes factors that influence international currency fluctuations; principles, advantages, and disadvantages of floating versus fixed exchange rates; and the effects of changes in international financial conditions on the United States economy.

Compare various types of economic systems (i.e., command, market, traditional).

Includes the structure, principles, and functions of command, market, and traditional economic systems.

Identify important works, theories, and theorists in economics.

Includes major works, theories, and theorists related to the development of modern noncapitalist systems; the development of capitalism before the twentieth century; and capitalism in the twentieth century.

Understand indicators of economic performance and comparisons of economic performance among contemporary economic systems (i.e., capitalist, socialist, communist).

Includes factors and procedures used in measuring and comparing national production and standards of living for various types of contemporary economic systems.

Understand characteristics of and relationships among contemporary developed economies (e.g., United States, USSR, Japan, Western Europe).

Includes major characteristics of developed noncommunist and communist economies; the structures, functions, and effects of major economic organizations and trade agreements; and the importance of the Middle East and other critical world areas.

Understand characteristics of less-developed economies and interrelationships with developed economies (e.g., impact of technology and human and natural resources).

Includes major characteristics of less-developed economies; characteristics, functions, and effects of organizations that provide economic assistance to less-developed countries; and historical and contemporary economic interrelationships between less-developed and developed countries.

CONSUMER ECONOMICS

Identify consumer rights, responsibilities, and limits on economic choices.

Includes rights and responsibilities of consumers; and factors that limit or guide individual economic choices.

Apply knowledge of consumer protection laws and agencies.

Includes consumer protection laws, characteristics and goals of various consumer groups and agencies; and consumer rights and responsibilities related to warranties and guarantees.

Understand the role of the consumer in the United States economic system (e.g., needs and wants, opportunity costs, consumer sovereignty).

Includes the role of the consumer in a market economy; the concept of opportunity costs; the influence of individual and societal values on individual economic decision making; and the roles of values and scarcity in determining individual needs and wants.

Understand consumer credit.

Includes types, sources, and characteristics of credit; the rights and responsibilities of creditors and debtors in various situations; factors involved in determining the cost of consumer credit; and criteria used for determining consumer credit ratings.

Understand insurance.

Includes characteristics, functions, benefits, and conditions related to life, health, automobile, and other types of insurance.

Understand personal investments and banking.

Includes characteristics, purposes, and benefits of various types of investments; various types of bank accounts; and regulatory mechanisms and agencies that protect investors and depositors.

Understand housing decisions.

Includes home and real estate purchases as consumer investments; mortgage, interest, and closing costs; decision-making criteria associated with home improvements and capital investments; and the characteristics and functions of property taxes.

Apply consumer skills (e.g., budgeting, comparison shopping).

Includes budgeting skills and principles of personal budgets; techniques of comparison shopping; deceptive sales practices; and principles, roles, and methods of advertising.