Pennsylvania Bulletin

PA Bulletin, Doc. No. 02-254a

[32 Pa.B. 905]

[Continued from previous Web Page]

XV.  GLOSSARY

Amendment (Constitutional): Changes in, or additions to, a constitution. Proposed by a two-thirds vote of both houses of Congress or by a convention called by Congress at the request of two-thirds of the state legislatures. Ratified by approval of three-fourths of the state.

Articles of Confederation: First framework of government of the United States, 1781. Created a weak national government, replaced in 1789 by the Constitution of the United States.

Authority: Right to control or direct the actions of others, legitimized by law, morality, custom or consent.

Autocracy: A government in which one person possesses unlimited power.

Bill of Rights: First Ten Amendments to the Constitution. Ratified in 1791, these amendments limit government power and protect basic rights and liberties of individuals.

Checks and balances: Constitutional mechanisms that authorize each branch of government to share powers with the other branches and thereby check their activities. For example, the president may veto legislation passed by Congress, the Senate must confirm major executive appointments and the courts may declare acts of Congress unconstitutional.

Citizen: Member of a political society who therefore owes allegiance to and is entitled to protection by and from the government.

Citizenship: Status of being a member of a state; one who owes allegiance to the government and is entitled to protection by and from the government.

Civic responsibilities: Obligation of citizens to take part in the governance of the school, community, tribe, state or nation.

Civil Law: Body of law, distinguishable from criminal law, which governs private rights of individuals.

Civil liberties: Areas of personal freedom with which governments are constrained from interfering. Usually spelled out in a bill of rights or constitution that guarantee the protection of persons, expression and property from the arbitrary influence of government officials.

Civil rights: Protections and privileges given to all United States citizens by the Constitution and Bill of Rights.

Civil society: The spheres of voluntary individual, social and economic relationships and organizations that although limited by law are not part of governmental institutions.

Classical republicanism: Refers to government that seeks the public or common good rather than the good of a particular group or class of society.

Common law: Judge made law that originated in England from decisions shaped according to prevailing custom. Decisions were reapplied to similar situations and thus became common to the nation.

Common or public good: Benefit or interest of a politically organized society as a whole.

Compromise: An agreement to settle differences; mutual concessions.

Concurrent powers: Authority that may be exercised by both the federal government and the state governments (e.g., levying taxes, borrowing money, spending for the general welfare).

Confederal: Relating to a league of independent states.

Confederation: A loose union of individual states connected by a weak or non-existent central government.

Consent of the governed: Agreement by the people to set up and live under a government. According to the natural rights philosophy, all legitimate governments must rest on the consent of the governed.

Constitutionalism: Idea that the powers of government should be distributed according to a written or unwritten constitution and that those powers should be effectively restrained by the constitution's provisions.

Delegated powers: Powers granted to the national government under the Constitution as enumerated in Articles I, II and III.

Democracy: Form of government in which political control is exercised by the people, either directly or through their elected representatives.

Diplomacy: The art and practice of conducting negotiations between nations.

Diplomat: One employed or skilled in conducting negotiations between nations.

Diversity: State of being different; variety.

Documents of government: Papers necessary for the organization and powers of government.

Due Process of Law: Right of every citizen to be protected against arbitrary action by government.

Enumerated powers: Powers that are specifically granted to Congress by Article I, Section 8 of the Constitution.

Equality: The condition of possessing substantially the same rights, privileges and immunities, and being substantially responsible for the same duties as other members of society.

Federal Supremacy Clause: Article VI of the Constitution provides that the Constitution and all federal laws and treaties shall be the ''Supreme Law of the Land.'' Therefore, all federal laws take precedence over state and local laws.

Federal system (or Federalism): Form of political organization in which governmental power is divided between a central government and territorial subdivisions (e.g., in the United States--the national, state and local governments).

Federalism: The distribution of power in a government between a central authority and states and the distribution of power among states with most powers retained by central government.

Foreign Policy: Actions of the federal government directed to matters beyond United States' borders, especially relations with other countries.

Government: Institutions and procedures through which a territory and its people are ruled.

Habeas Corpus: Court order demanding that the individual in custody be brought into court and shown the cause for detention. Habeas corpus is guaranteed by the Constitution and can be suspended only in the case of rebellion or invasion.

Individual responsibility: Fulfilling the moral and legal obligations of membership in society.

Individual rights: Just claims due a person by law, morality or tradition as opposed to those due to groups.

Interest group: Organized body of individuals who share same goals and try to influence public policy to meet those goals.

International organizations: Groups formed by nation-states to achieve common political, social or economic goals.

Judicial power: Authority to manage conflicts about the interpretation and application of the law.

Judicial Review: Doctrine that permits the federal courts to declare unconstitutional, and thus null and void, acts of the Congress, the executive branch and the states. The precedent for judicial review was established in the 1803 case of Marbury v. Madison.

Justice: That which may be obtained through fair distribution of benefits and burdens, fair correction of wrongs and injuries, or use of fair procedures in gathering information and making decisions.

Leadership: State or condition of one who guides or governs.

Liberal Democracy: Government that recognizes that the individual has rights that exist independently of government and which ought to be protected by and against government.

Liberty: Freedom from restraint under conditions essential to the equal enjoyment of the same right by others.

Majority rule: Decision by more than half of those participating in the decision-making process.

Minority rights: Opportunities that a member is entitled to have, or to receive from others within the limits of the law, even though he/she may not be part of the controlling group.

Nation-State: Divisions of the world in which each state claims sovereignty over defined territory and jurisdiction over everyone within it. These states interact using diplomacy, formal agreements and sanctions that may be peaceful or may involve the use of force.

NATO: North Atlantic Treaty Organization, an international transatlantic partnership consisting of various European states, the United States and Canada, which was designed through cooperation, consultation and collective defense to maintain peace and promote stability throughout Europe.

Non-governmental organization: A group in a free society that is not a part of any government institution and does not derive its power from government.

OAS: Organization of American States, an international governmental organization formed by the states of North and South America for security and the protection of mutual interests.

Oligarchy: A government in which a small group exercises control. These systems are usually based on wealth, military power or social position.

Patriotism: A feeling of pride in and respect for one's country.

Political efficacy: Belief that one can be effective and have an impact on public affairs.

Political party: Any group, however loosely organized, that seeks to elect government officials under a given label.

Political rights: Entitlement to participate in the political process.

Popular sovereignty: The concept that ultimate political authority rests with the people to create, alter or abolish governments.

Presumption of innocence: The legal concept that a criminal defendant is not guilty until the prosecution proves every element of the crime, beyond a reasonable doubt.

Privacy: The right to be left alone; the right of an individual to withhold one's self and one's property from public scrutiny if one so chooses.

Public service: Action of benefit to local, state or national communities through appointed or elected office.

Representative Democracy: Form of government in which power is held by the voters and is exercised indirectly through elected representatives who make decisions.

Republic: Form of government in which political control is exercised through elected representatives.

Republican government: System of government in which power is held by the voters and is exercised by elected representatives responsible for promoting the common welfare.

Right against self-incrimination: Individual right found in the Fifth Amendment to the United States Constitution that prevents an individual from being forced to testify against himself or herself.

Right of appeal: The right to seek review by a superior court of an injustice done or error committed by an inferior court, whose judgment or decision the court above is called upon to correct or reverse.

Right to counsel: Individual right found in the Sixth Amendment to the Constitution that requires criminal defendants to have access to legal representation.

Rule of Law: Principle that every member of a society, even a ruler, must follow the law.

Separation of powers: Distribution among the branches of government to ensure that the same person or group will not make the law, enforce the law and interpret the law.

State: A commonwealth; a nation; a civil power.

Treaty: Formal agreement between or among sovereign nations to create or restrict rights and responsibilities. In the United States all treaties must be approved by a two-thirds vote in the Senate.

Trial by jury: Individual right found in the Sixth and Seventh Amendment of the Constitution that guarantees a person an impartial jury.

Truth: Agreement of thought and reality that can eventually be verified.

Unitary government: An authoritative system in which all regulatory power is vested in a central government from which regional and local governments derive their powers (e.g., Great Britain and France as well as the American states within their spheres of authority).

Proposed Academic Standards for Economics

XVI.  TABLE OF CONTENTS

Introduction                     XVII.

THE ACADEMIC STANDARDS

Economic Systems 6.1.

Economic Theories

Economic Indicators

Fluctuations in Economic Activity

Markets and the Functions of Governments 6.2.

Consumers and Producers

Role of Money

Supply and Demand

Scarcity and Choice 6.3.

Economic Resources

Costs and Benefits

Opportunity Cost

Economic Interdependence 6.4.

Specialization

Why People Trade

Patterns of Economic Activities

Work and Earnings 6.5.

Profits and Losses

Income and Wealth

Risk and Rewards

Glossary XVIII.

XVII.  INTRODUCTION

   This document includes Proposed Academic Standards for Economics that describe what students should know and be able to do in five areas:

   *  6.1.  Economic Systems

   *  6.2.  Markets and the Functions of Governments

   *  6.3.  Scarcity and Choice

   *  6.4.  Economic Interdependence

   *  6.5.  Work and Earnings

   The Proposed Economic Standards describe what students should know and be able to do at four grade levels (third, sixth, ninth and twelfth). They reflect the increasing complexity and sophistication that students are expected to achieve as they progress through school. This document attempts to avoid repetition and makes obvious progression across grade levels. Topics and concepts in Economics directly relate to Environment and Ecology Standard 4.2 and Geography Standard 7.3. As a social science, Economics standards should be cross walked and related to the Civics and Government, Geography and History Standards to create an interdisciplinary view of the world.

   Economics is concerned with the behavior of individuals and institutions engaged in the production, exchange and consumption of goods and services. As technology helps to reshape the economy, knowledge of how the world works is critical. People entering the workforce cannot function effectively without a basic knowledge of the characteristics of economic systems, how markets establish prices, how scarcity and choice affect the allocation of resources, the global nature of economic interdependence and how work and earnings impact productivity.

   A Pennsylvania governor remarked, ''Among the freedoms we enjoy in America in our pursuit of happiness is the freedom to be independent, creative, visionary and entrepreneurial. We are free to pursue dreams...'' To succeed, however, every student must know how to manage resources, prepare for the workforce, make wise investments and be informed about public policy. These standards are intended to provide direction in learning how economic activity impacts the forces of everyday life.

   A glossary is included to assist the reader in clarifying terminology contained in the standards.

6.1.  Economic Systems

6.1.3.  GRADE 3 6.1.6.  GRADE 6 6.1.9.  GRADE 9 6.1.12.  GRADE 12

Pennsylvania's public schools shall teach, challenge and support every student to realize his or her maximum potential and to acquire the knowledge and skills needed to. . .

A.  Describe how individuals, families and communities with limited resources make choices. A.  Describe and identify the characteristics of traditional, command and market economic systems. A.  Analyze the similarities and differences in economic systems. A.  Evaluate the strengths and weaknesses of traditional, command and market economics.

B.  Describe alternative methods of allocating goods and services and advantages and disadvantages of them. B.  Explain the three basic questions that all economic systems attempt to answer.
*  What goods and ser   vices should be pro   duced?
*  How will goods and    services be produced?
*  Who will consume    goods and services? B.  Explain how traditional, command and market economies answer the basic economic questions. B.  Analyze the impact of traditional, command and market economies on the United States economy.

C.  Identify local economic activities.
*  Employment
*  Output C.  Define measures of economic activity and relate them to the health of the economy.
*  Prices
*  Employment
*  Output C.  Explain how economic indicators reflect changes in the economy.
*  Consumer Price Index    (CPI)
*  Gross Domestic Prod   uct (GDP)
*  Unemployment rate C.  Assess the strength of the regional, national and/or international economy and compare it to other years based upon economic indicators.

D.  Identify examples of local businesses opening, closing, expanding or contracting. D.  Explain the importance of expansion and contraction on individual businesses (e.g., gourmet food shops, auto repair shops, ski resorts). D.  Describe the historical examples of expansion, recession and depression in the United States. D.  Describe historical examples of expansion, recession, and depression internationally.

6.2. Markets and the Functions of Governments

6.2.3.  GRADE 3 6.2.6.  GRADE 6 6.2.9.  GRADE 9 6.2.12.  GRADE 12

Pennsylvania's public schools shall teach, challenge and support every student to realize his or her maximum potential and to acquire the knowledge and skills needed to. . .

A.  Define and identify goods, services, consumers and producers. A.  Describe market transactions in terms of goods, services, consumers and producers. A.  Explain the flow of goods, services and resources in a mixed economy. A.  Analyze the flows of products, resources and money in a mixed economy.

B.  Identify ways local businesses compete to get customers. B.  Describe the cost and benefits of competition to customers in markets. B.  Analyze how the number of consumers and producers affects the level of competition within a market. B.  Evaluate the operation of noncompetitive markets.

C.  Identify and compare means of payment.
*  Barter
*  Money C.  Explain the function of money and its use in society. C.  Explain the structure and purpose of the Federal Reserve System. C.  Analyze policies designed to raise or lower interest rates and how the Federal Reserve Board influences interest rates.

D.  Identify groups of competing producers in the local area. D.  Define economic institutions (e.g., banks, labor unions). D.  Analyze the functions of economic institutions (e.g., corporations, not-for-profit institutions). D.  Evaluate changes in economic institutions over time (e.g. stock markets, non-government organizations).

E.  Identify who supplies a product and who demands a product. E.  Explain how the interaction of buyers and sellers determines prices and quantities exchanged. E.  Explain the laws of supply and demand. E.  Predict how changes in supply and demand affect equilibrium price and quantity sold.

F.  Define price and identify the prices of different items. F.  Describe how prices influence both buyers and sellers and explain why prices may vary for similar products. F.  Analyze how competition among producers and consumers affects price, costs, product quality, service, product design and variety and advertising. F.  Identify and analyze forces that can change price.
*  Government actions
*  Weather conditions
*  International events

G.  Define what a tax is and identify a tax paid by most families. G.  Explain how taxes affect the price of goods and services. G.  Contrast the largest sources of tax revenue with where most tax revenue is spent in Pennsylvania. G.  Evaluate types of tax systems.
*  Progressive
*  Proportional
*  Regressive

H.  Identify government involvement in local economic activities. H.  Describe the Pennsylvania and United States governments' roles in monitoring economic activities. H.  Analyze the economic roles of governments in market economies.
*  Economic growth and    stability
*  Legal frameworks
*  Other economic goals    (e.g., environmental    protection, competi   tion) H.  Evaluate the economic roles of governments.
*  Macroeconomics (e.g.,    tariffs and quotas, ex   change rates, trade    balance)
*  Microeconomics (e.g.,    price controls, mo   nopolies, cartels)

I.  Identify goods and services produced by the government (e.g., postal service, food inspection). I.  Identify and describe public goods. I.  Explain how government provides public goods. I.  Evaluate government decisions to provide public goods.

J.  Explain the relationship between taxation and government services. J.  Explain the cost and benefits of taxation. J.  Contrast the taxation policies of the local, state and national governments in the economy. J.  Evaluate the social, political and economic changes in tax policy using cost/benefit analysis.

K.  Identify forms of advertising designed to influence personal choice. K.  Explain how advertisements influence perceptions of the costs and benefits of economic decisions. K.  Interpret how media reports can influence perceptions of the costs and benefits of decisions. K.  Analyze the impact of media on decision-making of consumers, producers and policymakers.

L.  Explain why most countries create their own form of money. L.  Explain what an exchange rate is. L.  Explain how the price of one currency is related to the price of another currency (e.g., Japanese yen in American dollar, Canadian dollar in Mexican Nuevo peso). L.  Analyze how policies and international events may change exchange rates.

6.3.  Scarcity and Choice

6.3.3.  GRADE 3 6.3.6.  GRADE 6 6.3.9.  GRADE 9 6.3.12.  GRADE 12

Pennsylvania's public schools shall teach, challenge and support every student to realize his or her maximum potential and to acquire the knowledge and skills needed to. . .

A.  Define scarcity and identify limited resources scarcity. A.  Explain how scarcity influences choices and behaviors.
*  Personal decision-   making
*  Family decision-   making
*  Community decision-   making A.  Describe ways to deal with scarcity.
*  Community
*  Pennsylvania
*  United States A.  Analyze actions taken as a result of scarcity issues in the regional, national and international economies.

B.  Define and identify wants of different people. B.  Explain how limited resources and unlimited wants cause scarcity in society. B.  Analyze how unlimited wants and limited resources affect decision-making. B.  Evaluate the economic reasoning behind a choice.

C.  Identify and define natural, human and capital resources. C.  Describe the human, natural and capital resources used to produce a specific good or service. C.  Explain how resources can be used in different ways to produce different goods and services. C.  Evaluate the allocation of resources used to produce goods and services.

D.  Identify costs and benefits associated with an economic decision. D.  Explain the costs and benefits of an economic decision. D.  Explain marginal analysis and decision-making. D.  Evaluate regional, national or international economic decisions using marginal analysis.

E.  Explain what is given up when making a choice. E.  Define opportunity cost and describe the opportunity cost of a personal choice. E.  Explain the opportunity cost of a public choice from different perspectives. E.  Analyze the opportunity cost of decisions by individuals, businesses, communities and nations.

F.  Explain how self interest influences choice. F.  Explain how negative and positive incentives affect choices people make. F.  Explain how incentives affect the behaviors of workers, savers, consumers and producers. F.  Evaluate in terms of marginal analysis how incentives influence decisions of consumers, producers and policy makers.

6.4.  Economic Interdependence

6.4.3.  GRADE 3 6.4.6.  GRADE 6 6.4.9.  GRADE 9 6.4.12.  GRADE 12

Pennsylvania's public schools shall teach, challenge and support every student to realize his or her maximum potential and to acquire the knowledge and skills needed to. . .

A.  Define specialization and the concept of division of labor. A.  Explain the advantages and disadvantages of specialization and division of labor. A.  Explain why specialization may lead to increased production and consumption. A.  Analyze how specialization may increase the standard of living.

B.  Explain why people trade. B.  Explain how specialization leads to more trade between people and nations. B.  Explain how trade may improve a society's standard of living. B.  Analyze the relationships between trade, competition, productivity.

C.  Explain why goods, services and resources come from all over the nation and the world. C.  Identify and define imports, exports, inter-regional trade and international trade. C.  Explain why governments sometimes restrict or subsidize trade. C.  Evaluate how a nation might benefit by lowering or removing trade barriers.

D.  Identify local resources.
*  Natural (renewable,    nonrenewable and flow    resources)
*  Human
*  Capital D.  Explain how the locations of resources, transportation and communication networks and technology have affected Pennsylvania economic patterns.
*  Agriculture (e.g.,    farms)
*  Forestry (e.g., logging)
*  Mining and mineral    extraction (e.g., coal    fields)
*  Manufacturing (e.g.,    steel mills)
*  Wholesale and retail    (e.g., super stores,    internet) D.  Explain how the locations of resources, transportation and communication networks and technology have affected United States economic patterns.
*  Labor markets (e.g.,    migrant workers)
*  Interstate highway    system and sea and    inland ports (e.g.,    movement of goods)
*  Communication tech   nologies (e.g., facsimile    transmission, satellite-   based communications) D.  Explain how the locations of resources, transportation and communication networks and technology have affected international economic patterns.

E.  Define specialization and identify examples of interdependence. E.  Explain how specialization and trade lead to interdependence. E.  Analyze how Pennsylvania consumers and producers participate in the global production and consumption of goods or services. E.  Analyze how United States consumers and producers participate in the global production and consumption of goods or services.

F.  Explain why some products are produced locally while others are not. F.  Explain how opportunity costs influence where goods and services are produced locally and regionally. F.  Explain how opportunity cost can be used to determine the product for which a nation has a comparative advantage. F.  Evaluate how trade is influenced by comparative advantage and opportunity costs.

G.  Identify local geographic patterns of economic activities.
*  Agriculture
*  Travel and tourism
*  Mining and mineral    extraction
*  Manufacturing
*  Wholesale and retail
*  Health services G.  Describe geographic patterns of economic activities in Pennsylvania.
*  Agriculture
*  Travel and tourism
*  Mining and mineral    extraction
*  Manufacturing
*  Wholesale and retail
*  Health services G.  Describe geographic patterns of economic activities in the United States.
*  Primary--extractive    industries (i.e., farm   ing, fishing, forestry    and mining)
*  Secondary--materials    processing industries    (i.e., manufacturing)
*  Tertiary--service in   dustries (e.g., retailing,    wholesaling, finance,    real estate, travel and    tourism, transporta   tion) G.  Evaluate characteristics and distribution of international economic activities.
*  Primary--extractive    industries (i.e., farm   ing, fishing, forestry    and mining)
*  Secondary--materials    processing industries    (i.e., manufacturing)
*  Tertiary--service in   dustries (e.g., retail   ing, wholesaling, fi   nance, real estate,    travel and tourism,    transportation)

6.5.  Work and Earnings

6.5.3.  GRADE 3 6.5.6.  GRADE 6 6.5.9.  GRADE 9 6.5.12.  GRADE 12

Pennsylvania's public schools shall teach, challenge and support every student to realize his or her maximum potential and to acquire the knowledge and skills needed to. . .

A.  Explain why people work to get goods and services. A.  Recognize that the availability of goods and services is the result of work by members of the society. A.  Define wages and explain how wages are determined by the supply of and demand of workers. A.  Analyze the factors influencing wages.
*  Demand for goods and services produced
*  Labor unions
*  Productivity
*  Education/skills

B.  Identify different occupations.
B.  Explain the concept of labor productivity.
B.  Describe how productivity is measured and identify ways in which a person can improve his or her productivity.
B.  Evaluate how changes in education, incentives, technology and capital investment alter productivity.

C.  Describe businesses that provide goods and businesses that provide services. C.  Compare the number of employees at different businesses. C.  Identify and explain the characteristics of the three types of businesses.
*  Sole Proprietorship
*  Partnership
*  Corporation C.  Analyze the costs and benefits of organizing a business as a sole proprietorship, partnership or corporation.

D.  Define profit and loss. D.  Explain how profits and losses serve as incentives. D.  Analyze how risks influence business decision-making D.  Analyze the role of profits and losses in the allocation of resources in a market economy.

E.  Identify examples of assets.
*  Tangible (e.g., houses,    cars, jewelry)
*  Financial assets (e.g.,    stocks, bonds, savings    accounts) E.  Describe how people accumulate tangible and financial assets through income, saving, and financial investment. E.  Define wealth and describe its distribution within and among the political divisions of the United States. E.  Compare distribution of wealth across nations.

F.  Define entrepreneurship and identify entrepreneurs in the local community. F.  Identify entrepreneurs in Pennsylvania.
*  Historical
*  Contemporary F.  Identify leading entrepreneurs in Pennsylvania and the United States and describe the risks they took and the rewards they received. F.  Assess the impact of entrepreneurs on the economy.

G.  Define saving and explain why people save. G.  Identify the costs and benefits of saving.
*  Piggy banks
*  Savings accounts
*  U.S. savings bonds G.  Explain the differences among stocks, bonds and mutual funds. G.  Analyze the risks and returns of various investments.
*  Stocks
*  Bonds
*  Mutual funds
*  Savings bonds
*  Retirement savings    (e.g., Individual Re   tirement Account    (IRA), Keogh, 401K)
*  Savings accounts (e.g.,    passbook, certificate of    deposit)

H.  Explain how banks bring savers and borrowers together. H.  Describe why there is a difference between interest rates for saving and borrowing. H.  Explain the impact of higher or lower interest rates for savers, borrowers, consumers and producers. H.  Evaluate benefits and costs of changes in interest rates to individuals and society.

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Amendment (Constitutional):	Changes in, or additions to, a constitution. Proposed by a two-thirds vote of both houses of Congress or by a convention called by Congress at the request of two-thirds of the state legislatures. Ratified by approval of three-fourths of the state.
Articles of Confederation:	First framework of government of the United States, 1781. Created a weak national government, replaced in 1789 by the Constitution of the United States.
Authority:	Right to control or direct the actions of others, legitimized by law, morality, custom or consent.
Autocracy:	A government in which one person possesses unlimited power.
Bill of Rights:	First Ten Amendments to the Constitution. Ratified in 1791, these amendments limit government power and protect basic rights and liberties of individuals.
Checks and balances:	Constitutional mechanisms that authorize each branch of government to share powers with the other branches and thereby check their activities. For example, the president may veto legislation passed by Congress, the Senate must confirm major executive appointments and the courts may declare acts of Congress unconstitutional.
Citizen:	Member of a political society who therefore owes allegiance to and is entitled to protection by and from the government.
Citizenship:	Status of being a member of a state; one who owes allegiance to the government and is entitled to protection by and from the government.
Civic responsibilities:	Obligation of citizens to take part in the governance of the school, community, tribe, state or nation.
Civil Law:	Body of law, distinguishable from criminal law, which governs private rights of individuals.
Civil liberties:	Areas of personal freedom with which governments are constrained from interfering. Usually spelled out in a bill of rights or constitution that guarantee the protection of persons, expression and property from the arbitrary influence of government officials.
Civil rights:	Protections and privileges given to all United States citizens by the Constitution and Bill of Rights.
Civil society:	The spheres of voluntary individual, social and economic relationships and organizations that although limited by law are not part of governmental institutions.
Classical republicanism:	Refers to government that seeks the public or common good rather than the good of a particular group or class of society.
Common law:	Judge made law that originated in England from decisions shaped according to prevailing custom. Decisions were reapplied to similar situations and thus became common to the nation.
Common or public good:	Benefit or interest of a politically organized society as a whole.
Compromise:	An agreement to settle differences; mutual concessions.
Concurrent powers:	Authority that may be exercised by both the federal government and the state governments (e.g., levying taxes, borrowing money, spending for the general welfare).
Confederal:	Relating to a league of independent states.
Confederation:	A loose union of individual states connected by a weak or non-existent central government.
Consent of the governed:	Agreement by the people to set up and live under a government. According to the natural rights philosophy, all legitimate governments must rest on the consent of the governed.
Constitutionalism:	Idea that the powers of government should be distributed according to a written or unwritten constitution and that those powers should be effectively restrained by the constitution's provisions.
Delegated powers:	Powers granted to the national government under the Constitution as enumerated in Articles I, II and III.
Democracy:	Form of government in which political control is exercised by the people, either directly or through their elected representatives.
Diplomacy:	The art and practice of conducting negotiations between nations.
Diplomat:	One employed or skilled in conducting negotiations between nations.
Diversity:	State of being different; variety.
Documents of government:	Papers necessary for the organization and powers of government.
Due Process of Law:	Right of every citizen to be protected against arbitrary action by government.
Enumerated powers:	Powers that are specifically granted to Congress by Article I, Section 8 of the Constitution.
Equality:	The condition of possessing substantially the same rights, privileges and immunities, and being substantially responsible for the same duties as other members of society.
Federal Supremacy Clause:	Article VI of the Constitution provides that the Constitution and all federal laws and treaties shall be the ''Supreme Law of the Land.'' Therefore, all federal laws take precedence over state and local laws.
Federal system (or Federalism):	Form of political organization in which governmental power is divided between a central government and territorial subdivisions (e.g., in the United States--the national, state and local governments).
Federalism:	The distribution of power in a government between a central authority and states and the distribution of power among states with most powers retained by central government.
Foreign Policy:	Actions of the federal government directed to matters beyond United States' borders, especially relations with other countries.
Government:	Institutions and procedures through which a territory and its people are ruled.
Habeas Corpus:	Court order demanding that the individual in custody be brought into court and shown the cause for detention. Habeas corpus is guaranteed by the Constitution and can be suspended only in the case of rebellion or invasion.
Individual responsibility:	Fulfilling the moral and legal obligations of membership in society.
Individual rights:	Just claims due a person by law, morality or tradition as opposed to those due to groups.
Interest group:	Organized body of individuals who share same goals and try to influence public policy to meet those goals.
International organizations:	Groups formed by nation-states to achieve common political, social or economic goals.
Judicial power:	Authority to manage conflicts about the interpretation and application of the law.
Judicial Review:	Doctrine that permits the federal courts to declare unconstitutional, and thus null and void, acts of the Congress, the executive branch and the states. The precedent for judicial review was established in the 1803 case of Marbury v. Madison.
Justice:	That which may be obtained through fair distribution of benefits and burdens, fair correction of wrongs and injuries, or use of fair procedures in gathering information and making decisions.
Leadership:	State or condition of one who guides or governs.
Liberal Democracy:	Government that recognizes that the individual has rights that exist independently of government and which ought to be protected by and against government.
Liberty:	Freedom from restraint under conditions essential to the equal enjoyment of the same right by others.
Majority rule:	Decision by more than half of those participating in the decision-making process.
Minority rights:	Opportunities that a member is entitled to have, or to receive from others within the limits of the law, even though he/she may not be part of the controlling group.
Nation-State:	Divisions of the world in which each state claims sovereignty over defined territory and jurisdiction over everyone within it. These states interact using diplomacy, formal agreements and sanctions that may be peaceful or may involve the use of force.
NATO:	North Atlantic Treaty Organization, an international transatlantic partnership consisting of various European states, the United States and Canada, which was designed through cooperation, consultation and collective defense to maintain peace and promote stability throughout Europe.
Non-governmental organization:	A group in a free society that is not a part of any government institution and does not derive its power from government.
OAS:	Organization of American States, an international governmental organization formed by the states of North and South America for security and the protection of mutual interests.
Oligarchy:	A government in which a small group exercises control. These systems are usually based on wealth, military power or social position.
Patriotism:	A feeling of pride in and respect for one's country.
Political efficacy:	Belief that one can be effective and have an impact on public affairs.
Political party:	Any group, however loosely organized, that seeks to elect government officials under a given label.
Political rights:	Entitlement to participate in the political process.
Popular sovereignty:	The concept that ultimate political authority rests with the people to create, alter or abolish governments.
Presumption of innocence:	The legal concept that a criminal defendant is not guilty until the prosecution proves every element of the crime, beyond a reasonable doubt.
Privacy:	The right to be left alone; the right of an individual to withhold one's self and one's property from public scrutiny if one so chooses.
Public service:	Action of benefit to local, state or national communities through appointed or elected office.
Representative Democracy:	Form of government in which power is held by the voters and is exercised indirectly through elected representatives who make decisions.
Republic:	Form of government in which political control is exercised through elected representatives.
Republican government:	System of government in which power is held by the voters and is exercised by elected representatives responsible for promoting the common welfare.
Right against self-incrimination:	Individual right found in the Fifth Amendment to the United States Constitution that prevents an individual from being forced to testify against himself or herself.
Right of appeal:	The right to seek review by a superior court of an injustice done or error committed by an inferior court, whose judgment or decision the court above is called upon to correct or reverse.
Right to counsel:	Individual right found in the Sixth Amendment to the Constitution that requires criminal defendants to have access to legal representation.
Rule of Law:	Principle that every member of a society, even a ruler, must follow the law.
Separation of powers:	Distribution among the branches of government to ensure that the same person or group will not make the law, enforce the law and interpret the law.
State:	A commonwealth; a nation; a civil power.
Treaty:	Formal agreement between or among sovereign nations to create or restrict rights and responsibilities. In the United States all treaties must be approved by a two-thirds vote in the Senate.
Trial by jury:	Individual right found in the Sixth and Seventh Amendment of the Constitution that guarantees a person an impartial jury.
Truth:	Agreement of thought and reality that can eventually be verified.
Unitary government:	An authoritative system in which all regulatory power is vested in a central government from which regional and local governments derive their powers (e.g., Great Britain and France as well as the American states within their spheres of authority).

Economic Systems	6.1.
Economic Theories
Economic Indicators
Fluctuations in Economic Activity
Markets and the Functions of Governments	6.2.
Consumers and Producers
Role of Money
Supply and Demand
Scarcity and Choice	6.3.
Economic Resources
Costs and Benefits
Opportunity Cost
Economic Interdependence	6.4.
Specialization
Why People Trade
Patterns of Economic Activities
Work and Earnings	6.5.
Profits and Losses
Income and Wealth
Risk and Rewards
Glossary	XVIII.

6.1. Economic Systems
6.1.3. GRADE 3	6.1.6. GRADE 6	6.1.9. GRADE 9	6.1.12. GRADE 12
*Pennsylvania's public schools shall teach, challenge and support every student to realize his or her maximum potential and to acquire the knowledge and skills needed to. . .*
A. Describe how individuals, families and communities with limited resources make choices.	A. Describe and identify the characteristics of traditional, command and market economic systems.	A. Analyze the similarities and differences in economic systems.	A. Evaluate the strengths and weaknesses of traditional, command and market economics.
B. Describe alternative methods of allocating goods and services and advantages and disadvantages of them.	B. Explain the three basic questions that all economic systems attempt to answer. * What goods and ser vices should be pro duced? * How will goods and services be produced? * Who will consume goods and services?	B. Explain how traditional, command and market economies answer the basic economic questions.	B. Analyze the impact of traditional, command and market economies on the United States economy.
C. Identify local economic activities. * Employment * Output	C. Define measures of economic activity and relate them to the health of the economy. * Prices * Employment * Output	C. Explain how economic indicators reflect changes in the economy. * Consumer Price Index (CPI) * Gross Domestic Prod uct (GDP) * Unemployment rate	C. Assess the strength of the regional, national and/or international economy and compare it to other years based upon economic indicators.
D. Identify examples of local businesses opening, closing, expanding or contracting.	D. Explain the importance of expansion and contraction on individual businesses (e.g., gourmet food shops, auto repair shops, ski resorts).	D. Describe the historical examples of expansion, recession and depression in the United States.	D. Describe historical examples of expansion, recession, and depression internationally.

6.2. Markets and the Functions of Governments
6.2.3. GRADE 3	6.2.6. GRADE 6	6.2.9. GRADE 9	6.2.12. GRADE 12
*Pennsylvania's public schools shall teach, challenge and support every student to realize his or her maximum potential and to acquire the knowledge and skills needed to. . .*
A. Define and identify goods, services, consumers and producers.	A. Describe market transactions in terms of goods, services, consumers and producers.	A. Explain the flow of goods, services and resources in a mixed economy.	A. Analyze the flows of products, resources and money in a mixed economy.
B. Identify ways local businesses compete to get customers.	B. Describe the cost and benefits of competition to customers in markets.	B. Analyze how the number of consumers and producers affects the level of competition within a market.	B. Evaluate the operation of noncompetitive markets.
C. Identify and compare means of payment. * Barter * Money	C. Explain the function of money and its use in society.	C. Explain the structure and purpose of the Federal Reserve System.	C. Analyze policies designed to raise or lower interest rates and how the Federal Reserve Board influences interest rates.
D. Identify groups of competing producers in the local area.	D. Define economic institutions (e.g., banks, labor unions).	D. Analyze the functions of economic institutions (e.g., corporations, not-for-profit institutions).	D. Evaluate changes in economic institutions over time (e.g. stock markets, non-government organizations).
E. Identify who supplies a product and who demands a product.	E. Explain how the interaction of buyers and sellers determines prices and quantities exchanged.	E. Explain the laws of supply and demand.	E. Predict how changes in supply and demand affect equilibrium price and quantity sold.
F. Define price and identify the prices of different items.	F. Describe how prices influence both buyers and sellers and explain why prices may vary for similar products.	F. Analyze how competition among producers and consumers affects price, costs, product quality, service, product design and variety and advertising.	F. Identify and analyze forces that can change price. * Government actions * Weather conditions * International events
G. Define what a tax is and identify a tax paid by most families.	G. Explain how taxes affect the price of goods and services.	G. Contrast the largest sources of tax revenue with where most tax revenue is spent in Pennsylvania.	G. Evaluate types of tax systems. * Progressive * Proportional * Regressive
H. Identify government involvement in local economic activities.	H. Describe the Pennsylvania and United States governments' roles in monitoring economic activities.	H. Analyze the economic roles of governments in market economies. * Economic growth and stability * Legal frameworks * Other economic goals (e.g., environmental protection, competi tion)	H. Evaluate the economic roles of governments. * Macroeconomics (e.g., tariffs and quotas, ex change rates, trade balance) * Microeconomics (e.g., price controls, mo nopolies, cartels)
I. Identify goods and services produced by the government (e.g., postal service, food inspection).	I. Identify and describe public goods.	I. Explain how government provides public goods.	I. Evaluate government decisions to provide public goods.
J. Explain the relationship between taxation and government services.	J. Explain the cost and benefits of taxation.	J. Contrast the taxation policies of the local, state and national governments in the economy.	J. Evaluate the social, political and economic changes in tax policy using cost/benefit analysis.
K. Identify forms of advertising designed to influence personal choice.	K. Explain how advertisements influence perceptions of the costs and benefits of economic decisions.	K. Interpret how media reports can influence perceptions of the costs and benefits of decisions.	K. Analyze the impact of media on decision-making of consumers, producers and policymakers.
L. Explain why most countries create their own form of money.	L. Explain what an exchange rate is.	L. Explain how the price of one currency is related to the price of another currency (e.g., Japanese yen in American dollar, Canadian dollar in Mexican Nuevo peso).	L. Analyze how policies and international events may change exchange rates.

6.3. Scarcity and Choice
6.3.3. GRADE 3	6.3.6. GRADE 6	6.3.9. GRADE 9	6.3.12. GRADE 12
*Pennsylvania's public schools shall teach, challenge and support every student to realize his or her maximum potential and to acquire the knowledge and skills needed to. . .*
A. Define scarcity and identify limited resources scarcity.	A. Explain how scarcity influences choices and behaviors. * Personal decision- making * Family decision- making * Community decision- making	A. Describe ways to deal with scarcity. * Community * Pennsylvania * United States	A. Analyze actions taken as a result of scarcity issues in the regional, national and international economies.
B. Define and identify wants of different people.	B. Explain how limited resources and unlimited wants cause scarcity in society.	B. Analyze how unlimited wants and limited resources affect decision-making.	B. Evaluate the economic reasoning behind a choice.
C. Identify and define natural, human and capital resources.	C. Describe the human, natural and capital resources used to produce a specific good or service.	C. Explain how resources can be used in different ways to produce different goods and services.	C. Evaluate the allocation of resources used to produce goods and services.
D. Identify costs and benefits associated with an economic decision.	D. Explain the costs and benefits of an economic decision.	D. Explain marginal analysis and decision-making.	D. Evaluate regional, national or international economic decisions using marginal analysis.
E. Explain what is given up when making a choice.	E. Define opportunity cost and describe the opportunity cost of a personal choice.	E. Explain the opportunity cost of a public choice from different perspectives.	E. Analyze the opportunity cost of decisions by individuals, businesses, communities and nations.
F. Explain how self interest influences choice.	F. Explain how negative and positive incentives affect choices people make.	F. Explain how incentives affect the behaviors of workers, savers, consumers and producers.	F. Evaluate in terms of marginal analysis how incentives influence decisions of consumers, producers and policy makers.

6.4. Economic Interdependence
6.4.3. GRADE 3	6.4.6. GRADE 6	6.4.9. GRADE 9	6.4.12. GRADE 12
*Pennsylvania's public schools shall teach, challenge and support every student to realize his or her maximum potential and to acquire the knowledge and skills needed to. . .*
A. Define specialization and the concept of division of labor.	A. Explain the advantages and disadvantages of specialization and division of labor.	A. Explain why specialization may lead to increased production and consumption.	A. Analyze how specialization may increase the standard of living.
B. Explain why people trade.	B. Explain how specialization leads to more trade between people and nations.	B. Explain how trade may improve a society's standard of living.	B. Analyze the relationships between trade, competition, productivity.
C. Explain why goods, services and resources come from all over the nation and the world.	C. Identify and define imports, exports, inter-regional trade and international trade.	C. Explain why governments sometimes restrict or subsidize trade.	C. Evaluate how a nation might benefit by lowering or removing trade barriers.
D. Identify local resources. * Natural (renewable, nonrenewable and flow resources) * Human * Capital	D. Explain how the locations of resources, transportation and communication networks and technology have affected Pennsylvania economic patterns. * Agriculture (e.g., farms) * Forestry (e.g., logging) * Mining and mineral extraction (e.g., coal fields) * Manufacturing (e.g., steel mills) * Wholesale and retail (e.g., super stores, internet)	D. Explain how the locations of resources, transportation and communication networks and technology have affected United States economic patterns. * Labor markets (e.g., migrant workers) * Interstate highway system and sea and inland ports (e.g., movement of goods) * Communication tech nologies (e.g., facsimile transmission, satellite- based communications)	D. Explain how the locations of resources, transportation and communication networks and technology have affected international economic patterns.
E. Define specialization and identify examples of interdependence.	E. Explain how specialization and trade lead to interdependence.	E. Analyze how Pennsylvania consumers and producers participate in the global production and consumption of goods or services.	E. Analyze how United States consumers and producers participate in the global production and consumption of goods or services.
F. Explain why some products are produced locally while others are not.	F. Explain how opportunity costs influence where goods and services are produced locally and regionally.	F. Explain how opportunity cost can be used to determine the product for which a nation has a comparative advantage.	F. Evaluate how trade is influenced by comparative advantage and opportunity costs.
G. Identify local geographic patterns of economic activities. * Agriculture * Travel and tourism * Mining and mineral extraction * Manufacturing * Wholesale and retail * Health services	G. Describe geographic patterns of economic activities in Pennsylvania. * Agriculture * Travel and tourism * Mining and mineral extraction * Manufacturing * Wholesale and retail * Health services	G. Describe geographic patterns of economic activities in the United States. * Primary--extractive industries (i.e., farm ing, fishing, forestry and mining) * Secondary--materials processing industries (i.e., manufacturing) * Tertiary--service in dustries (e.g., retailing, wholesaling, finance, real estate, travel and tourism, transporta tion)	G. Evaluate characteristics and distribution of international economic activities. * Primary--extractive industries (i.e., farm ing, fishing, forestry and mining) * Secondary--materials processing industries (i.e., manufacturing) * Tertiary--service in dustries (e.g., retail ing, wholesaling, fi nance, real estate, travel and tourism, transportation)

6.5. Work and Earnings
6.5.3. GRADE 3	6.5.6. GRADE 6	6.5.9. GRADE 9	6.5.12. GRADE 12
*Pennsylvania's public schools shall teach, challenge and support every student to realize his or her maximum potential and to acquire the knowledge and skills needed to. . .*
A. Explain why people work to get goods and services.	A. Recognize that the availability of goods and services is the result of work by members of the society.	A. Define wages and explain how wages are determined by the supply of and demand of workers.	A. Analyze the factors influencing wages. * Demand for goods and services produced * Labor unions * Productivity * Education/skills
B. Identify different occupations.	B. Explain the concept of labor productivity.	B. Describe how productivity is measured and identify ways in which a person can improve his or her productivity.	B. Evaluate how changes in education, incentives, technology and capital investment alter productivity.
C. Describe businesses that provide goods and businesses that provide services.	C. Compare the number of employees at different businesses.	C. Identify and explain the characteristics of the three types of businesses. * Sole Proprietorship * Partnership * Corporation	C. Analyze the costs and benefits of organizing a business as a sole proprietorship, partnership or corporation.
D. Define profit and loss.	D. Explain how profits and losses serve as incentives.	D. Analyze how risks influence business decision-making	D. Analyze the role of profits and losses in the allocation of resources in a market economy.
E. Identify examples of assets. * Tangible (e.g., houses, cars, jewelry) * Financial assets (e.g., stocks, bonds, savings accounts)	E. Describe how people accumulate tangible and financial assets through income, saving, and financial investment.	E. Define wealth and describe its distribution within and among the political divisions of the United States.	E. Compare distribution of wealth across nations.
F. Define entrepreneurship and identify entrepreneurs in the local community.	F. Identify entrepreneurs in Pennsylvania. * Historical * Contemporary	F. Identify leading entrepreneurs in Pennsylvania and the United States and describe the risks they took and the rewards they received.	F. Assess the impact of entrepreneurs on the economy.
G. Define saving and explain why people save.	G. Identify the costs and benefits of saving. * Piggy banks * Savings accounts * U.S. savings bonds	G. Explain the differences among stocks, bonds and mutual funds.	G. Analyze the risks and returns of various investments. * Stocks * Bonds * Mutual funds * Savings bonds * Retirement savings (e.g., Individual Re tirement Account (IRA), Keogh, 401K) * Savings accounts (e.g., passbook, certificate of deposit)
H. Explain how banks bring savers and borrowers together.	H. Describe why there is a difference between interest rates for saving and borrowing.	H. Explain the impact of higher or lower interest rates for savers, borrowers, consumers and producers.	H. Evaluate benefits and costs of changes in interest rates to individuals and society.