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Economics and Financial Literacy

Economic Decision Making and Skills

1. Economists analyze multiple sources of data to predict trends, make inferences, and arrive at conclusions.
2. Reading financial reports (bank statements, stock market reports, mutual fund statements) enables individuals to make and analyze decisions about personal finances.

Fundamentals of Economics

3. People cannot have all the goods and services they want and, as a result, must choose some things and give up others.
4. Different economic systems (traditional, market, command, and mixed) utilize different methods to allocate limited resources.
5. Markets exist when consumers and producers interact. When supply or demand changes, market prices adjust. Those adjustments send signals and provide incentives to consumers and producers to change their own decisions.
6. Competition among sellers lowers costs and prices, and encourages producers to produce more of what consumers are willing and able to buy. Competition among buyers increases prices and allocates goods and services to those people who are willing and able to pay the most for them.

Government and the Economy

7. A nation’s overall level of economic well-being is determined by the interaction of spending and production decisions made by all households, firms, government agencies and others in the economy. Economic well-being can be assessed by analyzing economic indicators gathered by the government.
8. Economic policy decisions made by governments result in both intended and unintended consequences.

Global Economy

9. When regions and nations use comparative advantage to produce at the lowest cost and then trade with others, production, consumption and interdependence increase.
10. Government actions, such as tariffs, quotas, subsidies, trade agreements and membership in multinational economic organizations, significantly impact international trade.

Working and Earning

11. Income is determined by many factors including individual skills and abilities, work ethic and market conditions.
12. Employee earning statements include information about gross wages, benefits, taxes and other deductions.

Financial Responsibility and Money Management

13. Financial decision-making involves considering alternatives by examining costs and benefits.
14. A personal financial plan includes financial goals and a budget, including spending on goods and services, savings and investments, insurance and philanthropy.
15. Different payment methods have advantages and disadvantages.

Saving and Investing

16. Saving and investing help to build wealth.
17. Savings can serve as a buffer against economic hardship.
18. Different costs and benefits are associated with saving and investing alternatives.
19. Banks, brokerages and insurance companies provide access to investments such as certificates of deposit, stocks, bonds and mutual funds.

Credit and Debt

20. There are costs and benefits associated with various sources of credit available from different types of financial institutions.
21. Credit and debt can be managed to maintain credit worthiness.
22. Consumer protection laws provide financial safeguards.

Risk Management

23. Property and liability insurance protect against risks associated with use of property.
24. Health, disability and life insurance protect against risks associated with increased expenses and loss of income.
25. Steps can be taken to safeguard one’s personal financial information and reduce the risk of loss.