1. SOCIAL STUDIES Domain III

2. COMPETENCY 22 Economics The teacher understands the concepts and processes of government and the responsibilities of citizenship; knows how people organize economic systems to produce, distribute, and consume goods and services; and applies social science skills to information, ideas, and issues related to government and economics.

3. Basic Principles of Economy Definition: Economics is a social science that analyzes the principles that regulate production, distribution, and consumption of resources in society. Macroeconomics Microeconomics

4. Basic Principles of Economy Macro = Study of the economy at the world, regional, state, and local levels (inflation, unemployment, economic growth) Micro= Deals with specific issues related to the decision making process at the household, firm, or industry levels

5. BASIC PRINCIPLES THEORY OF SUPPLY AND DEMAND GOODS AND SERVICES FREE ENTERPRISE MONEY AND BANKING INFLATION AND DEFLATION DIRECT TAXATION OF US CITIZENS (16 TH AMENDMENT) INTERDEPENDENCE OF ECONOMIES

6. SUPPLY AND DEMAND PRICES VARY BASED ON AVAILABILITY (AT A CERTAIN PRICE) AND WILLINGNESS TO PAY THAT PRICE NATURALLY OR ARTIFICIAL EXAMPLE: GASOLINE PRICES, MILK PRICES

7. GOODS AND SERVICES ELI WHITNEY – INVENTOR OF ASSEMBLY LINE CONCEPT IN MANUFACTURING COST DECREASES / PRODUCTIVITY INCREASES INCREASES LIKELIHOOD OF FAMILIES BECOMING CONSUMERS, INSTEAD OF PRODUCERS

8. FREE ENTERPRISE ECONOMIC AND POLICITAL DOCTRINE OF THE CAPITALIST SYSTEM ECONOMY CAN REGULATE ITSELF IN A FREELY COMPETITIVE MARKET WITH LITTLE GOVERNMENT INTERVENTION LED TO GLOBALIZATION: CROSS-BORDER, INTERDEPENDENCE

9. MONEY AND BANKING THE FEDERAL RESERVE SYSTEM PURPOSE: ENSURE A STRONG BANKING INDUSTRY FEDERAL RESERVE BOARD OF GOVERNORS (APPOINTED TO 7 YEAR TERM, MAXIMUM 14) ALAN GREENSPAN – CHAIRMAN 18 ½ YEARS

10. INFLATION AND DEFLATION FEDERAL RESERVE BANK – SETS THE INTEREST RATES BANKS USE TO LEND MONEY GOAL IS TO KEEP A HEALTHY BALANCE BETWEEN INFLATION AND DEFLATION INFLATION - REDUCES THE PURCHASING POWER OR VALUE OF MONEY DEFLATION – IS THE OPPOSITE

11. INTERDEPENDENCE OF ECONOMIES STATE, NATIONAL, AND WORLD MARKETS TEXAS ECONOMY IS BASED ON TELECOMMUNICATIONS, SOFTWARE, FINANCE, BIOTECHNOLOGY, AGRICULTURE, RANCHING, OIL AND COAL NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) OPEC DECISIONS ABOUT OIL PRICES AFFECT TEXAS