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Personal Money

Management
Choices

Fill in the Personal Money Management


Vocabulary Chart as the terms are
discussed.

The personal money


management choices that
you make will have a
significant affect on your life.
Therefore, it is important to
learn good money habits
now.

Money is the medium of exchange


used to buy goods and services.

There are several forms of money.


Some common forms are shown below.

Which
A Debit
ofCard
theseisforms
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a credit
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a bank account.

Your income provides you


with money to spend on
whatever you choose.
Income is when people give
time and services to an
employer in return for
receiving money.

Do any of you get an


income?
Allowance maybe? Could this
be considered income?
Do you have to do jobs to
get your allowance?

Good personal money


management choices can lead
to increased income over time.

Credit is used when people buy


something now and pay for it later.
Two forms of credit are shown below.

When you buy something on


credit, you usually have to pay the
amount you borrowed plus an
additional amount in interest.

Interest is a fee paid for the


use of someone elses
money.

With a seat partner, share an


experience in your life when
you know credit was used to
purchase something.
If you cannot think of anything,
come up with something that
you think might need to be
purchased using credit.

What else can you do with


money other than spend it?

SAVE IT!

How can you save money?

One way money can be saved


is by putting it in a bank where it
can earn interest.

Money saved can also be


invested to increase your
income.

Investing is giving money


or resources to gain a
financial return.

Types of Investing
Real Estate
Stocks
Bonds
Mutual Fund
Collectibles
Commodities
Certificate of Deposit (CD)

Commodities
Collectibles
Based on the pictures
shown, discuss your
thoughts about the
meaning of Real Estate,
Commodities, and
Collectibles.

Certificates of Deposit a certificate issued by a bank to


a person depositing money for a specified length of time

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or governmental) that borrows
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Mutual
many investors for the purpose of investing in stocks,
bonds, and other assets. Investors own small amounts of
many different assets.

Make sure your Personal Money


Management Vocabulary Chart is complete
including illustrations for each term.

Personal Money
Management
Review
Worksheet

Summarizing Strategy:
Write a short story using the following
terms: Money, Income, Credit, Interest,
and Investing
Be sure to write a story, not a paragraph
defining the terms. The terms should be
used in context. For example: Susies job is
_______ where her income is ______ a year.
She loves spending.

Economic
Systems

Essential Question:
How do economic systems answer
the questions of what, how, and for
whom to produce?

Standards:
SS6E1a, SS6E5a, SS6E8a.
Compare how traditional, command, and
market economies answer the economic
questions of (1) what to produce, (2) how to
produce, and (3) for whom to produce
SS6E1b, SS6E5b, SS6E8b.
Explain how most countries have a mixed
economy located on a continuum between
pure market and pure command.

Economic Systems
A Country must decide how to
distribute its resources to meet
the needs of its people.
How a country makes these
decisions determines its type of
economic system.

An Economic System is the


way a society organizes the
production, distribution,
and consumption of goods
and services.

Vocabulary
Break
In small groups, sort the pictures
provided as examples of production,
distribution, or consumption

Economic Systems
There are 3 basic types of
economic systems that have to
answer three basic questions:
(1) What to produce?
(2) How to produce?
(3) For Whom to produce?

Economic Systems
WHAT TO PRODUCE? (What kinds of goods and services
should be produced?)
HOW TO PRODUCE? (What productive resources are
used to produce goods and services?)
FOR WHOM TO PRODUCE? (Who gets to have the goods
and services?
The way a society answers these questions determines
its economic system.

Types of Economic Systems:


1. Traditional Economy
2. Command Economy
3. Market Economy

Follow teacher instructions to


create your Economic Systems
Foldable to use for note-taking

Traditional Economy
An economic system in which economic
decisions are based on customs and
beliefs
People will make what they always made &
will do the same work their parents did
Exchange of goods is done through
Bartering: trading without using money

Traditional Economy
Who decides what to produce?
People follow their customs and make only what
is needed to take care of oneself

Who decides how to produce goods &


services?
People grow & make things the same way that
their ancestors did

For Whom are the goods & services


produced for?
Self and trading purposes (people
in the village who need them)

Traditional Economy
Examples:
Villages in Africa and South America; the
Inuit tribes in Canada; the caste system in
parts of rural India

Strengths: Predictable job and lifestyle


Weaknesses: Lack resources and limited
production

Distributed Summarizing

Draw an illustration in
your foldable that
represents a
Traditional Economy.

Command Economy
Government makes all economic
decisions & owns most of the property
Sometimes called communism
Examples: Cuba, former Soviet Union,
North Korea
This system has not been very
successful & more and more countries
are abandoning it

Command Economy
Who decides what to produce?
Government makes all economic decisions

Who decides how to produce goods and


services?
Government decides how to make
goods/services

For Whom are the goods and


services produced for?
Whoever the government decides to give them
to

Command Economy
Strengths: people do not have to
worry about employment, housing,
education, and healthcare
Weaknesses: consumers own
nothing, no choices/freedom,
limited innovation by individuals

Distributed Summarizing

Draw an illustration in
your foldable that
represents a
Command Economy.

Market Economy
In a market economy, buyers and sellers answer
the three economic questions
All resources are privately owned
Who decides what to produce?
Whatever the market demands that will produce
a profit
Who decides how to produce goods and services?
Private producers (businesses)
For Whom are the goods and services produced
for?
Consumers who demand the product and are
willing to pay

Market Economy
Strengths: People can start their
own businesses, more choice
Weaknesses: The desire for money
may lead to poor quality of goods
and services, business owners have
to risk losing money

Distributed Summarizing:

Draw an illustration in
your foldable that
represents a Market
Economy.

Distributed
Summarizing:

Economic
System Quotes

Mixed Economy
Market + Command = Mixed
There are no pure command or market
economies. To some degree, all modern
economies show characteristics of both
systems and are often referred to as mixed
economies.
Most economies are closer to one type of
economic system than another
For example, businesses own resources and
determine what and how to produce, but the
Government regulates certain industries

Mixed Economy
Most democratic countries fall in this
category (there are no truly pure Market
or Command economies).
Examples: U.S., Brazil, Mexico, Canada,
UK, etc.

Continuum of Economies
Mixed

Pure
Command

Pure
Market

Name That
Economic System
Activity

Summarizing
Strategy

Economic Systems
Continuum Activity

How does specialization


encourage trade
between countries?
SS6E2a, SS6E9a
Explain how specialization encourages trade
between countries

Use the Factors of Voluntary Trade Graphic


Organizer to take notes on Specialization
during this presentation.

Specialization encourages
voluntary trade and can be a
positive factor in a countrys
economy.
Specialization occurs when one
country can produce a good or
service at a lower opportunity
cost than another country.

Vocabulary Review:
With a seat partner determine whether the images
represent a good or a service.

Goods
Services

Reviewing Opportunity Cost


Watch the short slideshow below on
opportunity cost
http://www.econedlink.org/interactives/index.
php?iid=190
Look at the next slide for demonstrating
opportunity cost

Look at the three sets of items below. From each set,


select the item that you would buy if you had the
money.
Set 1
New book
New movie
New video game

Set 2
New shirt
New shoes
New pants

Set 3
Movie ticket
Concert ticket
Sporting event
ticket
When instructed by the teacher, turn to a seat
partner and identify from each set the item that you
would buy and the opportunity cost for each set.

Specialization Activity:
Specialized Bags,
Card Specialty
or another activity

How does specialization


impact trade?
Specialization encourages trade
between countries because a country
can get what it needs at the lowest cost
when it is produced by another country
that specializes in that item.

Distributed Summarizing:
With a seat partner, discuss the following

Identify a hobby, sport,


subject, etc. in which you
could specialize. Explain why.

Summarizing Strategy
Answer the essential
question, how does
specialization encourage
trade between countries?

How are tariffs, quotas,


and embargos barriers
to trade?
SS6E2b, SS6E6a, SS6E9c
Compare and contrast different types of
trade barriers such as tariffs, quotas, and
embargos

Use the Factors of Voluntary Trade Graphic


Organizer to take notes on Trade Barriers
during this presentation.

Sometimes countries set up


Trade Barriers to restrict trade
because they want to sell and
produce their own goods.
Trade Barriers include:
Tariff
Quota
Embargo

Trade Barrier: Tariff

Tariffs are taxes placed on


imported goods.
Tariffs cause the consumer to pay a higher
price for an imported item, increasing the
demand for a lower-priced item produced
domestically.

Trade Barriers: Tariffs


American Revolution

Trade Barrier: Quotas

Quotas are limits on the


amount of a good that can be
imported into a country.
Quotas can cause shortages that cause
prices to rise.

Trade Barrier:
Embargos

Embargoes forbid trade with


another country.
The United States had a trade embargo with
South Africa during apartheid.

Trade Barriers:
Embargos
Embargoes usually happen for
political reasons. Because the United
States does not want to support
countries that may support terrorism,
it has used embargos against Iran,
Iraq, and Syria.

Trade Barrier
Identification
Activity

Distributed Summarizing
On the bottom of your Trade Barrier Identification Activity
sheet, answer the following scenario:
The Canadian Pear Growers Association is concerned about
increased competition from imported pears that are larger than
those grown within Canadas borders.
The Association wants to lobby for a trade barrier. Some
members think a tariff or quota would be most beneficial.
Others disagree and suggest an embargo would be best.

Which Trade Barrier Would You Recommend? Why?

Summarizing Strategy
Answer the following questions on the Trade Barriers Response
Sheet

1.
2.

3.

Identify something in your life in which you


would be willing to pay a tariff. Explain why.
Identify something in your life in which your
parent or teacher might place a quota. Explain
why.
Identify something in your life in which your
parent or teacher might place an embargo.
Explain why.

Why is it necessary to
exchange currencies in
order for nations to trade?
SS6E2d, SS6E6b, SS6E9c.
Explain why international trade requires a
system for exchanging currencies between
nations.

Use the Factors of Voluntary Trade Graphic


Organizer to take notes on Currency Exchange
during this presentation.

Countries trade because no


country has all of the resources
it needs to provide for its people.
Moreover, every country has
different resources.

What are resources?


With a seat partner, make a list
of examples of resources.
What happens when you do not
have the resources you need?

We have a
global economy
because countries
trade with others
from all over the
world.

The global economy


makes countries
interdependent.

The Trading Game


Activity

In the Trading Game, you


participated in Voluntary
Trade.
Our global economy is
successful because of
Voluntary Trade

Voluntary Trade happens when


both countries expect to gain
from the trade.
The buyer country receives
goods and the seller country
makes money.

International trade
involves countries
from all over the
world engaging in
voluntary trade.

Currency Exchange &


International Trade
Exchange rates provide a
procedure for determining the
value of ones currency in terms
of anothers currency.

Summarizing Strategy
How would trade be affected if
there were no system for
exchanging currency?

What is the relationship


between human capital,
capital investment, and
GDP?
SS6E3a-b, SS6E7a-b, SS6E10a-b,
SS6G4c, SS6G11e, SS6G14b

SS6E3a, SS6E7a, SS6E10a


Explain the relationship between investment
in human capital (education and training) and
gross domestic product (GDP)

SS6E3b, SS6E7b, SS6E10b


Explain the relationship between investment
in capital (factories, machinery, and
technology) and gross domestic product
(GDP)

SS6G4c,SS6G11c, SS6G14b
Evaluate how the literacy rate affects the
standard of living

Use the Factors of Economic


Growth Graphic Organizer to
take notes during the lesson.

With a seat partner, answer the following


questions:

1. How do you measure your height?


2. How do you measure the amount of
drink you have in your cup?
3. How do you measure the
temperature outside?

So then, How do you think the


growth of an economy is
measured?

How is Economic Growth


Measured?
Economic growth in a country is
measured by the countrys Gross
Domestic Product (GDP) in one
year
GDP = the total of goods and
services produced in one year within
a country

Gross Domestic Product (GDP)


GDP is a domestic measurement because
it measures only what has been produced
within a country this does not include
products that are imported.
It is much better for the economy of a
country to produce its own goods and
services [this increases the countrys GDP].

Gross Domestic Product


Measuring the GDP each year can:
Compare one countrys economy to
another
Check a countrys economic progress
over time
Show if the economy is growing or not

What is GDP?
Video clip

Economic Growth
There are 4 main factors that influence
economic growth within a country:

Investment in Human Capital


Investment in Physical Capital
Land [natural resources] available
Entrepreneurship
The presence or absence of these 4
factors determine the countrys Gross
Domestic Product for the year

Investment
What do you think investment
means? Turn to a seat partner
and share your thoughts.
Investment is when money,
resources, or opportunities are
provided in order to gain profitable
returns in the future
Who makes the investment???

Investment in Human Capital


Human Capital refers to the
people who perform labor
When countries invest in Human
Capital, they are providing
education and/or training for the
people who perform the labor
How would investing in human
capital impact the GDP of a
country?

Investment in Human Capital


Studies have shown that investment
in the education and skills training of
people relates to a higher GDP.
Education and the abilities it develops
create a smarter and more productive
workforce, which leads to greater
economic growth.

Human Capital, Literacy


Rate, and Standard of Living
There is a relationship between education levels
and human capital in terms of peoples ability to
produce income.
Literacy Rate is the number of people in an area
that can read and write.
Standard of Living is a level of material comfort
as measured by the goods, services, and
luxuries available to an individual, group, or
nation.

Standard of Living
What are some of the goods,
services, and luxuries that
someone with a high standard of
living might enjoy that someone
with a low standard of living
might not enjoy?

Standard of Living
Country
Literacy Rate
GDP per capita
Life Expectancy
Unemployment
Rate

Puerto Rico
94.1%
$18,700
78.58
12%

Haiti
52.9 %
$1,400
57.56
40.6%

With a seat partner, discuss which


country you think has the higher
standard of living. Be able to explain
your answer.

Human Capital, Literacy


Rate, and Standard of Living
If you can read, you can learn. If you can learn,
you can improve your work skills, and get a
better job that pays a better salary. If you have a
better salary, you can improve your standard of
living.
A country that improves the literacy rate among
its citizens will improve the standard of living
within that country and improve its economy.
Educated and skilled workers are an important
factor in a countrys economic growth.

Human Capital
What is the current
investment in your
human capital?

Investment in Capital [Physical]


Physical Capital refers to the
factories, machinery, and technology
used to produce goods and services.
When countries invest in Physical
Capital, they are providing better
facilities, resources and/or materials
for the people who perform the labor
How would investing in physical
capital impact the GDP of a country?

Investment in Physical Capital


Investment in physical capital relates to
a higher GDP.
More advanced factories, machinery,
and technology creates a more
productive workforce, which leads to
greater economic growth [higher GDP].

Distributed Summarizing

Capital Shuffle Activity


[Partner Task]
My Capital Investment
[Individual Task]

Activating Strategy:

Concept
Attainment
Activity

How do natural
resources affect a
countrys economy?
SS6E3c, SS6E7c, SS6E10c.
Describe the role of natural
resources in a countrys
economy.

Use the Factors that Influence


Economic Growth Graphic
Organizer to take notes during
the lesson.

Economic Growth
There are 4 main factors that influence
economic growth within a country:

Land [natural resources] available


Investment in Human Capital
Investment in Physical Capital
Entrepreneurship
The presence or absence of these 4
factors determine the countrys Gross
Domestic Product for the year

Natural Resources
Natural Resources are
materials or substances
that occur in nature and
can be used for economic
gain.

Natural Resources
With a seat partner, discuss
the following question:
How does the presence or
absence of natural
resources impact a
countrys economy [GDP]?

Natural Resources
Countries that have a lot of natural
resources are able to use them to
produce goods and services cheaper
than a country that has to import
natural resources.
Therefore, a country with a lot of
natural resources USUALLY has a
greater GDP than a country with little
natural resources.

Comparing
Natural
Resources
Worksheet

What is the role of


entrepreneurship in a
countrys economy?
SS6E3d, SS6E7d, SS6E10d.
Describe the role of
entrepreneurship.

Use the Factors that Influence


Economic Growth Graphic
Organizer to take notes during
the lesson.

Economic Growth
There are 4 main factors that influence
economic growth within a country:

Land [natural resources] available


Investment in Human Capital
Investment in Physical Capital
Entrepreneurship
The presence or absence of these 4
factors determine the countrys Gross
Domestic Product for the year

Entrepreneurship
An Entrepreneur is someone who has
an idea for a good or service and takes
the risks to produce it.
Entrepreneurs are important because
they come up with new ideas and use
human, capital, and natural resources
to bring their ideas to life and to the
marketplace.

Entrepreneurship
It can be several things:
Starting your own business
Inventing something new
Changing the way something
was previously done so that it
works better

How does Entrepreneurship


Influence Economic Growth?
Entrepreneurship creates jobs and
reduces unemployment
Entrepreneurship encourages
people to take risks, and in doing
so, create better materials,
products, technologies, etc.
The more entrepreneurs a country
has, the higher the countrys GDP

Summarizing Strategy
Pretend you have an idea for a
business. Describe your idea.
Explain what it would take for
you to become an
entrepreneur using your idea.

How do the countries of the


United Kingdom, Germany, and
Russia answer basic economic
Standard:
questions?
SS6E5c. Compare the basic types of economic systems
found in the United Kingdom, Germany, and Russia.
SS6E5a. Compare how traditional, command, and
market economies answer the economic questions of
(1) what to produce (2) how to produce (3) for whom to
produce
SS6E5b. Explain how most countries have a mixed
economy located on a continuum between pure market

EUROPE
ECONOMIC
SYSTEMS

Use the Economic Systems of


Europe Graphic Organizer to
record your information

United Kingdoms Mixed Market


Economy
Service industries like banking,
insurance, and business services
account for most of the UKs gross
domestic product
Over the decades, the government
has turned over many state-owned
companies to private ownership
setting up free market competition
In short, the United Kingdom has a
mixed market economy because
some of its economy is driven by
producers, consumers, and

Germanys Mixed Market


Economy
An export-based economy focused on
manufacturing and products [relies on
global markets]
There is also still an issue with
updating the Eastern German
economy to compete and operate
equally with Western Germany

[Western Germany invests money


in Eastern German states to help modernize
and update factories and production lines.
West Germany had to bring
East Germanys command economy into its
market economy]

Russias Mixed Market


Economy
Russia has struggled as it
transitions from a command
economy under the Soviet Union to a
mixed market economy today
Many government-owned companies
are being sold to private businesses,
but the Russian government is still
largely involved with many aspects
of the economy
Russia faces financial problems and
huge costs to improve its old plants
and industries to be more efficient

Think, Pair, Share:

Answer the question on the bottom of


your

Explain why the United Kingdom and Germany are closer to the
market side of the continuum even though all three countries are
identified as a mixed market economy.

The economic continuum is based on


government control. More government control
means the closer a country is to a command
economy. Less government control means the
closer a country is to a market economy.
There is more government control of the
economy in Russia than in Germany or the
United Kingdom; therefore, Russia lies closer
to the command side of the continuum.

Economic Systems of Europe


Summarizer

The Economic Systems


of Brazil and Cuba

Brazil
There is competition in most major
industries.
What does this mean? What kind of economic
system does this suggest Brazil has?

The two largest banks are government


owned.
What does this mean? What kind of economic
system does this suggest Brazil has?

Brazil
Strongest economy of all the South
American countries
Strong agricultural, mining,
manufacturing and service industries
Government controls some areas like
health care, some banks, and postal
service.

What do you think?


So Brazil has a _____________ market
economy!
Why?

Brazil
Top trading partners: The United States
and Argentina
Brazil is the #1 producer of coffee in the
world
Other products:
Crops: sugarcane and oranges
Manufacturing: cars, trucks and other items
made of steel (Brazil has iron ore deposits as
a natural resource)

Cuba
According to Cubas government, most industries are
owned by the government. The U.S. banned trade with
Cuba because of its communist government.
What does this mean? What type of economic system does
this suggest that Cuba has?

Cuba has a thriving informal economy, where people can


get goods and services the government doesnt provide.
This informal economy is based on competition.
What does this mean? What type of economic system does
this suggest that Cuba has?

Cuba
BUT ULTIMATELY Government owns all
resources and property, and decides what
and how much is to be produced.

What do you think?


Cuba has a _________________
economy!
Why?

Cuba
Trading Partners: Venezuela and China
(the Soviet Union was Cubas main trading
partner before its collapse)
Major Exports: sugar, nickel, tobacco and
fish

Now, lets get to work!


Complete the Economic
Systems Analysis on Brazil
and Cuba!

Stop and Think!


(Directions)

Step One: On your


own!
1. List 3 5 main ideas
of todays lesson on
the economies of
Brazil and Cuba.
2. Write down at least
1 thing that you are
still confused about.

Step Two: With your partner!


1. Compare your lists.
2. Write a main idea statement
(a complete sentence!) for
todays lesson using each of
your lists.
3. Using the issues/confusing
points you each listed either:
1. Write a statement
correcting the confusion,
if you can help each other.
2. Write questions to pose to
the class, so that you can
write a correct statement.