| (a) General requirements. This course will be taught
in the social studies department and is recommended to be taught in
Grade 12.
(b) Introduction.
(1) Economics with Emphasis on the Free Enterprise
System and Its Benefits is the culmination of the economic content
and concepts studied from Kindergarten through required secondary
courses. The focus is on the basic principles concerning production,
consumption, and distribution of goods and services (the problem of
scarcity) in the United States and a comparison with those in other
countries around the world. Students analyze the interaction of supply,
demand, and price. Students will investigate the concepts of specialization
and international trade, economic growth, key economic measurements,
and monetary and fiscal policy. Students will study the roles of the
Federal Reserve System and other financial institutions, government,
and businesses in a free enterprise system. Types of business ownership
and market structures are discussed. The course also incorporates
instruction in personal financial literacy. Students apply critical-thinking
skills using economic concepts to evaluate the costs and benefits
of economic issues.
(2) Students identify the role of the U.S. free enterprise
system within the parameters of this course and understand that this
system may also be referenced as capitalism or the free market system.
(3) Economics with Emphasis on the Free Enterprise
System and Its Benefits builds upon the foundation in economics and
social studies laid by the social studies essential knowledge and
skills in Kindergarten-Grade 12. The course will apply these skills
to current economic situations. The content enables students to understand
the importance of patriotism, function in a free enterprise society,
and appreciate the basic democratic values of our state and nation
as referenced in the Texas Education Code (TEC), §28.002(h).
(4) Students understand that a constitutional republic
is a representative form of government whose representatives derive
their authority from the consent of the governed, serve for an established
tenure, and are sworn to uphold the constitution.
(5) As referenced in House Bill 492, an act of the
Texas Legislature signed into law in 2005, the concepts of personal
financial literacy are to be mastered by students in order that they
may become self-supporting adults who can make informed decisions
relating to personal financial matters. These concepts are incorporated
into the student expectations of Economics with Emphasis on the Free
Enterprise System and Its Benefits: understanding interest, avoiding
and eliminating credit card debt; understanding the rights and responsibilities
of renting or buying a home; managing money to make the transition
from renting a home to home ownership; starting a small business;
being a prudent investor in the stock market and using other investment
options; beginning a savings program and planning for retirement;
bankruptcy; types of bank accounts available to consumers and benefits
of maintaining a bank account; balancing a checkbook; types of loans
available to consumers and becoming a low-risk borrower; understanding
insurance; and charitable giving.
(6) State and federal laws mandate a variety of celebrations
and observances, including Celebrate Freedom Week.
(A) Each social studies class shall include, during
Celebrate Freedom Week as provided under the TEC, §29.907, or
during another full school week as determined by the board of trustees
of a school district, appropriate instruction concerning the intent,
meaning, and importance of the Declaration of Independence and the
U.S. Constitution, including the Bill of Rights, in their historical
contexts. The study of the Declaration of Independence must include
the study of the relationship of the ideas expressed in that document
to subsequent American history, including the relationship of its
ideas to the rich diversity of our people as a nation of immigrants,
the American Revolution, the formulation of the U.S. Constitution,
and the abolitionist movement, which led to the Emancipation Proclamation
and the women's suffrage movement.
(B) Each school district shall require that, during
Celebrate Freedom Week or other week of instruction prescribed under
subparagraph (A) of this paragraph, students in Grades 3-12 study
and recite the following text from the Declaration of Independence:
"We hold these Truths to be self-evident, that all Men are created
equal, that they are endowed by their Creator with certain unalienable
Rights, that among these are Life, Liberty and the Pursuit of Happiness--That
to secure these Rights, Governments are instituted among Men, deriving
their just Powers from the Consent of the Governed."
(7) Students discuss how and whether the actions of
U.S. citizens and the local, state, and federal governments have achieved
the ideals espoused in the founding documents.
(c) Knowledge and skills.
(1) Economics. The student understands the concepts
of scarcity and opportunity costs. The student is expected to:
(A) explain why scarcity and choice are basic economic
problems faced by every society;
(B) describe how societies answer the basic economic
questions: what to produce, how to produce, and for whom to produce;
(C) describe the economic factors of production: land,
labor, capital, and entrepreneurship; and
(D) interpret a production-possibilities curve and
apply the concepts of opportunity costs and scarcity.
(2) Economics. The student understands the interaction
of supply, demand, and price. The student is expected to:
(A) understand the effect of changes in price on the
quantity demanded and quantity supplied;
(B) identify the non-price determinants that create
changes in supply and demand, which result in a new equilibrium price;
and
(C) interpret a supply-and-demand graph using supply-and-demand
schedules.
(3) Economics. The student understands the reasons
for international trade and its importance to the United States and
the global economy. The student is expected to:
(A) apply the concepts of absolute and comparative
advantages;
(B) compare the effects of free trade and trade barriers
on economic activities, including the benefits and costs of participating
in international trade; and
(C) analyze the effects of changes in exchange rates
on imports and exports.
(4) Economics. The student understands free enterprise,
socialist, and communist economic systems. The student is expected
to:
(A) explain the basic characteristics of economic systems,
including property rights, incentives, economic freedom, competition,
and the role of government;
(B) contrast current and historic examples of the free
enterprise system, socialism, and communism using the basic characteristics
of economic systems; and
(C) analyze the contributions of various economic philosophers,
including Friedrich Hayek, Milton Friedman, John Maynard Keynes, and
Adam Smith, and their impact on the U.S. free enterprise system.
(5) Economics. The student understands the basic characteristics
and benefits of the U.S. free enterprise system. The student is expected
to:
(A) explain the benefits of the U.S. free enterprise
system, including individual freedom of consumers and producers, variety
of goods, responsive prices, investment opportunities, and the creation
of wealth; and
(B) analyze recent changes in the basic characteristics,
including private property, incentives, economic freedom, competition,
and the limited role of government, of the U.S. economy.
(6) Economics. The student understands the right to
own, use, and dispose of private property. The student is expected
to:
(A) analyze the costs and benefits of the purchase,
use, or disposal of personal and business property; and
(B) identify and evaluate examples of restrictions
that the government places on the use of business and individual property.
(7) Economics. The student understands the circular-flow
model of the economy. The student is expected to:
(A) interpret the roles of resource owners and firms
in a circular-flow model of the economy and provide real-world examples
to illustrate elements of the model; and
(B) explain how government actions affect the circular-flow
model.
(8) Economics. The student understands types of market
structures. The student is expected to:
(A) describe characteristics and give examples of pure
competition, monopolistic competition, oligopoly, and monopoly; and
(B) identify regulations that apply to the establishment
and operation of various types of market structures.
(9) Economics. The student understands key economic
measurements. The student is expected to:
(A) interpret economic data, including unemployment
rate, gross domestic product, gross domestic product per capita as
a measure of national wealth, and rate of inflation; and
(B) analyze business cycles using key economic indicators.
(10) Economics. The student understands key components
of economic growth. The student is expected to:
(A) analyze how productivity relates to growth;
(B) analyze how technology relates to growth; and
(C) analyze how trade relates to growth.
(11) Economics. The student understands the role of
money in an economy. The student is expected to:
(A) describe the functions of money;
(B) describe the characteristics of money, including
commodity money, fiat money, and representative money; and
(C) analyze the positive and negative aspects of barter,
currency, and debit cards.
(12) Economics. The student understands the role of
the Federal Reserve System in establishing monetary policy. The student
is expected to:
(A) explain the structure of the Federal Reserve System;
(B) analyze the three basic tools used to implement
U.S. monetary policy, including reserve requirements, the discount
rate and the federal funds rate target, and open-market operations;
(C) explain how the actions of the Federal Reserve
System affect the nation's money supply; and
(D) describe the current role of the U.S. dollar in
trade in the world market and analyze how that has changed over time,
in particular since departing from the gold standard in 1971.
(13) Economics. The student understands the role that
the government plays in the U.S. free enterprise system. The student
is expected to:
(A) describe the role of government in the U.S. free
enterprise system and the changes in that role over time; and
(B) analyze the costs and benefits of U.S. economic
policies, rules, and regulations related to the economic goals of
economic growth, stability, full employment, freedom, security, equity
(equal opportunity versus equal outcome), and efficiency.
(14) Economics. The student understands the economic
impact of fiscal policy decisions at the local, state, and national
levels. The student is expected to:
(A) identify types of taxes at the local, state, and
national levels and the economic importance of each;
(B) explain the categories of revenues and expenditures
in the U.S. federal budget; and
(C) analyze the impact of fiscal policy decisions on
the economy.
(15) Personal financial literacy. The student understands
types of business ownership. The student is expected to:
(A) explain the characteristics of sole proprietorships,
partnerships, and corporations; and
(B) analyze the advantages and disadvantages of sole
proprietorships, partnerships, and corporations.
(16) Personal financial literacy. The student understands
the role of financial markets/institutions in saving, borrowing, and
capital formation. The student is expected to:
(A) explain the functions of financial institutions
and how they affect households and businesses;
(B) explain how the amount of savings in an economy
is the basis of capital formation;
(C) analyze the role of interest and risk in allocating
savings to its most productive use; and
(D) examine the types of accounts available to consumers
from financial institutions and the risks, monetary costs, and benefits
of maintaining these accounts.
(17) Personal financial literacy. The student understands
the role of individuals in financial markets. The student is expected
to:
(A) assess ways to be a wise investor in the stock
market and in other personal investment options such as developing
a personal retirement plan;
(B) explain how to begin a savings program;
(C) demonstrate how to maintain a checking account,
including reconciling a bank statement;
(D) identify the types of loans available to consumers;
(E) explain the responsibilities and obligations of
borrowing money; and
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