Junior Achievement, in cooperation with the Social Science Education Consortium, has developed 12 "Economic Investigations" designed to help High School students achieve a deeper understanding of current economic issues. Each investigation:
- Provides a classroom orientation to explore economic concepts similar to the type of experience students would encounter in a laboratory science course.
- Reinforces the development of quantitative skills by bringing economic concepts to life through the use of real situations.
- Focuses on intriguing economics questions designed to spark student and teacher interest.
Since 1979, women have been increasingly involved in the U.S. economic system. In that year, women’s median weekly earnings for full-time wage and salary workers were 63% of men’s weekly earnings. In 2001, women were earning 76% of men’s weekly earnings. Real earnings for white women improved by 24.6% between 1979 and 2001. For white men during the same time period, real earnings grew by 2.4%. Women and men with less than a high school education have seen their real incomes decrease since 1979. The former has seen a 9.0% reduction, while the latter has experienced a 27.6% decrease in earnings. For women with college degrees, their real income has increased by 30.9%, while men with college degrees have had their real income increase by 20.2% (Highlights of Women’s Earnings in 2001).
Over the past 50 years, transplanting organs (such as kidneys, livers, hearts, and lungs) has become a widespread practice. Better techniques and medications have greatly improved the success rates of transplant procedures. Yet, the current policies for distributing transplantable organs have had unexpected results. For decades, the number of patients needing organ transplants has been greater than the number of organs supplied. In 2002, more than 6,000 people died waiting for organs. In 2003, there were more than 80,000 people on the organ waiting list: but by June of that year, only 12,500 transplants had been performed. The result was that many people died before a transplantable organ became available.
“Economic Investigations: There Is More to the Story” was a National Science Foundation funded project, which began in September 2003. The Social Science Education Consortium (SSEC) of Boulder, Colorado, was the grantee agency. James Davis, Executive Director of the SSEC, was the project director, and Donald Wentworth, Professor Emeritus of Pacific Lutheran University, was project co-director.
The United States is a wealthy nation. It produces more goods and services per capita than any other nation. Yet, poverty remains a persistent problem. The official poverty rate in the United States in 2002 was 12.1 percent—up from 11.7 percent in 2001. In 2002, 34.6 million people were classified as being in poverty. African Americans and Hispanics have higher percentages of people in poverty than do whites. About 24 percent of African Americans and 21.8 percent of Hispanics are classified as being in poverty, compared to 8 percent of whites.
Medical care in the United States is arguably the best in the world. Yet, increasing costs of both health care and health insurance are making the nation’s excellent care less accessible to millions of Americans. Despite that in 2004 the United States devoted 16 percent of its Gross Domestic Product to health care, 23 of the 26 Organization for Economic Cooperation and Development (OECD) countries had lower infant mortality rates, and 17 had higher life expectancies than the United States.
In the United States, the provision of health care evolved over the last century as a mix of employment-based health insurance and government-provided safety nets (Medicare for the elderly and Medicaid for the poor). Most observers would agree that, given the above statistics and the fact that in 2003 almost 44 million Americans were uninsured, the system is terribly flawed. Yet, there is much disagreement as to how to fix the problems. Should there be a greater emphasis on market solutions or on government solutions?
This investigation focuses on measuring the performance of the United States economy. It goes well beyond what students might learn from print or television media and tells much of the rest of the story. Students begin with the reading The Measurement of Economic Performance. This text summarizes the Employment Act of 1946 and defines the principal measures of economic performance, a set of performance targets, and the states of economic performance. The Employment Act of 1946 established the legal foundation for the national stabilization policy. The principal measures of economic performance include Gross Domestic Product, the unemployment rate, and the Consumer Price Index. The performance targets define the intended performance of the economy.
Inflation typically is defined as a sustained increase in a nation’s average price levels. Students are taught to measure it by calculating changes in the Consumer Price Index (CPI) and the Gross Domestic Product (GDP) Deflator. However, higher prices are not the only result of inflation. Inflation affects the value of a nation’s currency and arbitrarily redistributes national income. In turn, each of these conditions influences consumers’ buying decisions, which affect overall economic performance.
Most people read about changes in the unemployment rate with interest. They see it as an important indicator of how well the economy is functioning. Yet, it often is a source of confusion. Most people think that an adult is unemployed if he or she does not have a job. They also think that people receiving unemployment compensation payments are counted to create the unemployment rate figures. Neither is the case. There is more to the story.
This investigation examines the use of fiscal policy in regulating the performance of the national economy. The investigation begins with a brief reading that discusses the nature, objectives, and the tools of fiscal policy. The investigation provides a set of four visuals focusing on fiscal policy, which can be used to reinforce the reading. The investigation also includes a set of exercises in applied fiscal policy analysis. Students examine three cases using the data set in Table 1, and one case using current data retrieved from Internet websites. The use of actual economic performance data helps students understand that the full story of fiscal policy is far from simple.
This investigation examines the Federal Reserve System (The Fed) and its use of monetary policy to regulate the performance of the national economy. The investigation includes two readings. The first (optional) is a brief overview of The Fed and the objectives and tools of monetary policy. The second concentrates on the liquidity preference theory of interest, which tells more of the story behind monetary policy. The theory serves as a foundation for The Fed’s current monetary policy and focuses on the use of open-market operations to regulate short-term interest rates.
Trade Policy between the United States and Africa
“In May 2000, the Trade and Development Act of 2000 containing the African Growth and Opportunity Act (AGOA) was passed by the Congress and signed into law. The AGOA establishes a new framework for U.S. trade, investment, and development policy for subSaharan Africa. The Administration plans to fully implement the AGOA and to broaden and deepen U.S. relations with the countries of sub-Saharan Africa. The Administration will pursue a strategy to expand free markets, trade, and economic growth in sub-Saharan Africa. Achieving these objectives will benefit the United States and sub-Saharan African countries by helping to create healthier, more-stable economies, stronger, more-democratic governments in Africa; and expanded markets for U.S. exports. Expanding trade with Africa supports the values and policy objectives of this Administration to promote economic development and political freedom and stability in the poorest regions of the world.” (2001 Comprehensive Report of the President of the United States on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the African Growth and Opportunity Act.)
By implementing the AGOA, has the United States achieved all of the above-mentioned goals pertaining to sub-Saharan Africa?
As the United States becomes more involved with international trade, economic changes occur that influence employment. Imported goods compete with goods produced by domestic companies. Some domestic companies cannot match the imported goods for quality, price, or public popularity. In these situations, domestic companies either reduce production, stop production, or switch to other products. Each of these alternatives may negatively affect the employment of their workers. Estimates of job loss due to import competition vary widely, yet it is very difficult to determine which jobs are lost because of import competition, which to changing technology, and which to changes in the economy. Even so, many people think the U.S. economy should be less involved in international trade. They fear Americans’ jobs are being lost forever and the number of work opportunities are being decreased in the United States.
Diane Dang, Assistant Principal
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