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USA National Standards for Concept "Income"

NATIONAL STANDARD 13 - INCOME: Students will understand that: Income for most people is determined by the market value of the productive resources they sell. What workers earn primarily depends on the market value of what they produce.

Students will be able to use this knowledge to: Predict future earnings based on their current plans for education, training, and career options.

In a market economy, wages and salaries the prices of labor services are determined just as other prices are, by the interaction of buyers and sellers. The buyers of labor services are employers. They are willing to pay higher wages and salaries to those employees who can produce more or better goods or services in a given amount of time. Students who understand this will appreciate the value of the skills they can acquire by completing high school, and perhaps college or a vocational training program.

Understanding the forces affecting wages and other sources of income will be increasingly important in the future, when workers may change employers and careers more often than in the past. Regardless of the occupations or industries in which today's students eventually work, they are likely to find that they will have to continue their education and training to maintain or increase their earnings.

You can find additional online lessons on US Standard 13 from the Council for Economic Education Website.



Financial Literacy 1 - EARNING INCOME: Income for most people is determined by the market value of their labor, paid as wages and salaries. People can increase their income and job opportunities by choosing to acquire more education, work experience, and job skills. The decision to undertake an activity that increases income or job opportunities is affected by the expected benefits and costs of such an activity. Income also is obtained from other sources such as interest, rents, capital gains, dividends, and profits.

This standard focuses on income earned or received by people. The primary focus at the 4th grade level is to describe different types of jobs as well as different forms of income earned or received. Attention at the 8th grade level turns to the benefits and costs of increasing income through the acquisition of education and skills. Government programs that affect income are introduced. The 12th grade level gives further emphasis to types of income and taxes, highlights benefit-cost decisions related to jobs and careers, and introduces labor markets.



Financial Literacy 2 - BUYING GOODS AND SERVICES: People cannot buy or make all the goods and services they want; as a result, people choose to buy some goods and services and not buy others. People can improve their economic well-being by making informed spending decisions, which entails collecting information, planning, and budgeting.

The 4th grade benchmarks introduce the concepts of scarcity, choice, and opportunity cost. Factors that influence spending choices, such as advertising, peer pressure, and spending choices of others, are analyzed. Attention is given to comparing the costs and benefits of spending decisions. The basics of budgeting and planning are introduced. The 8th grade benchmarks expand upon these concepts. More attention is paid to making a spending decision. Payment methods are introduced along with the importance of weighing the costs and benefits of each. Budgeting is discussed in more detail, including the classification of expenses. The 12th grade benchmarks frame a consumer’s decision using economic ideas such as satisfaction, determinants of demand, costs of information search, choice of product durability and other features, and the role of government and other institutions in providing information for consumers.