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Virtual Economics

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Lesson 12 - Building Wealth over the Long Term
Learning, Earning and Investing: High School
The students are introduced to the case of Charlayne, a woman who becomes, accidentally, a millionaire. Charlayne's success, the students learn, was unexpected, but not a miracle. It can be explained by three widely understood rules for building wealth over the long term: saving early, buying and holding, and diversifying. The lesson uses Charlayne's decisions to illustrate each of these rules. It...
Grade(s): 6-8, 9-12
Concepts: Compound interest, Diversification, Forms of saving and investing, Reward, Risk

Lesson 6 - What Is a Bond?
Learning, Earning and Investing: High School
In this lesson the students learn what bonds are and how bonds work. They learn the basic terminology related to bonds and participate in a simulation activity aimed at showing that bonds are certificates of indebtedness, similar to an IOU note. Finally, the students explore credit ratings and calculate average coupon rates for various bond ratings in order to determine the relationship between ra...
Grade(s): 6-8, 9-12
Concepts: Bond, Bond rating, Coupon, Coupon bond, Coupon rate, Default, Face value, Maturity date, Par value, Risk, Zero-coupon bond

Lesson 15 - Why Don't People Save?
Learning, Earning and Investing: High School
The students examine risk-oriented behavior, considering why people often engage in behavior that is dangerous or unhealthy. They are introduced to the concept of cost/benefit analysis and asked to apply what they learn to questions about saving. They generate lists of savings goals and categorize those goals as short-term, medium-term and long-term. They learn why long-term goals are more difficu...
Grade(s): 6-8, 9-12
Concepts: Benefits, Costs, Goals, Incentives, Interest, Long-term goal, Medium-term goal, Opportunity cost, Saving, Short-term goal

Theme 3: Lesson 11 - Saving and Investing Are Risky Business
Financial Fitness for Life: Shaping Up Your Financial Future - Grades 6-8 - Teacher Guide
In this lesson, the students learn that savings and investment instruments carry various types of risk. Students learn about the risks of inflation, interest rate fluctuation, and financial loss. With any type of investment, there is at least one kind of risk. They also learn that risk must be measured against reward.
Grade(s): 6-8
Concepts: Opportunity cost, Inflation risk, Interest rate risk, Risk of financial loss, Savings account, Certificate of deposit, Money market deposit account, U.S. Savings Bond,

Lesson 16 - What We've Learned
Learning, Earning and Investing: High School
This lesson features a game in which the students review key vocabulary words and concepts presented in earlier lessons. The game is called Flyswatter Review. The teacher divides the class into two teams. Using transparencies, the teacher projects financial terms from the visuals onto a screen or wall. The teams compete to select the correct definition.
Grade(s): 6-8, 9-12
Concepts: Stock Market, Stock, Mutual Fund, Risk, Liquidity, Liquidity Risk

Theme 3: Lesson 8 - Who Pays and Who Receives?
Financial Fitness for Life: Shaping Up Your Financial Future - Grades 6-8 - Teacher Guide
In this lesson, students learn that banks are businesses and, as such, seek to make a profit. One way banks do this is by charging borrowers a higher rate of interest than the interest that is paid to savers. Students discover that three factors affect how money grows: amount deposited, interest rate, and time. Students calculate interest--both simple and compound--and they formulate a generali...
Grade(s): 6-8
Concepts: Interest, Interest rate, Simple interest, Compound interest, Compounding, Opportunity cost, Rule of 72,

Lesson 13 - Researching Companies
Learning, Earning and Investing: High School
The students apply an economic way of thinking to gathering information regarding securities. They learn that the cost of acquiring information must be compared to the anticipated benefit the information will provide. The students discuss the example of LeBron James and recognize that there is intense competition to find information about companies. They select companies to research by participati...
Grade(s): 6-8, 9-12
Concepts: Alternatives, Choice, Fundamental analysis, Opportunity cost, Scarcity

Lesson 7 - What Are Mutual Funds?
Learning, Earning and Investing: High School
The students form class investment clubs that work much in the way mutual funds do. They invest $3,000 (300 shares at $10 a share) in up to six stocks. One year later they revalue their shares and determine whether a share in their class investment clubs has increased or decreased in value. Finally, they read about mutual funds and learn that the concept behind mutual funds is similar to the conce...
Grade(s): 6-8, 9-12
Concepts: Diversification, Liquidity, Load, Mutual fund, Net asset value, Risk and reward

Lesson 1 - Why Save?
Learning, Earning and Investing: High School
Following an introduction that defines saving, the students discuss the idea of "paying yourself first" and the reasons why people save. After reporting on their small-group discussions, the students simulate the accumulation of simple interest and compound interest. The lesson concludes with students calculating both simple interest and, using the Rule of 72, the amount of time it takes savings t...
Grade(s): 6-8, 9-12
Concepts: Compound interest, Consumption, Income, Rule of 72, Saving, Simple interest

Lesson 2 - Investors and Investments
Learning, Earning and Investing: High School
In this lesson the students explore different types of investments, some of which are unconventional, in order to grasp the basic idea that investment involves trading off present benefits for future satisfaction. The students also apply the criteria of risk, return and liquidity to define more precisely the meaning of investing.
Grade(s): 6-8, 9-12
Concepts: Investing, Investment, Liquidity, Return, Risk

Lesson 15 - Savers And Borrowers
Focus: Middle School Economics
In this lesson, students encounter difficulties in lending and borrowing. They identify financial institutions as effective intermediaries in this process. In closure they discuss the role credit can have on the growth of a community.
Grade(s): 6-8
Concepts: Saving, Interest, Financial intermediaries

Lesson 23 - Investing Involves Decision Making
Learning, Earning and Investing: High School
This lesson provides an overall review and an opportunity for students to apply many of the concepts stressed in earlier lessons. The students examine different sorts of risk that come with investments. They are introduced to a fivestep decision-making model. After practicing with it, they apply the model in a simulation activity in which they act as financial advisors, offering financial advice i...
Grade(s): 6-8, 9-12
Concepts: Bonds, Capital gain, Certificate of deposit, Dividend, Diversification, Liquidity, Money market account, Mutual funds, Principal, Rate of return, Risk, Savings account, Stocks

Lesson 11 - Financial Institutions in the U.S. Economy
Learning, Earning and Investing: High School
The students participate in a brief trading activity to illustrate the role institutions play in bringing savers and borrowers together, thus channeling savings to investment. The students discuss financial institutions, such as banks and credit unions, and they participate in a simulation activity to help them understand primary and secondary stock markets and bond markets.
Grade(s): 6-8, 9-12
Concepts: Debt financing, Economic growth, Economic investment, Equity financing, Financial institutions, Financial investment, Interest, Primary markets, Secondary markets

Theme 3: Lesson 9 - Stocks and Mutual Funds
Financial Fitness for Life: Shaping Up Your Financial Future - Grades 6-8 - Teacher Guide
In this lesson, the student examine the nature of stocks including how stocks are issued, differences in their levels of risk, and the differences in possible returns. The students also compare and contrast stocks with various savings plans provided by financial institutions. The nature of mutual funds, which allows diversification and reduction of risk, will also be covered.
Grade(s): 6-8
Concepts: Equity, Stocks, Mutual funds, Risk, Diversification, Stock market

Lesson 14 - Credit: Your Best Friend or Your Worst Enemy?
Learning, Earning and Investing: High School
The students do an exercise that shows how credit can be their worst enemy. They learn how quickly credit card balances can grow and how long it can take to pay off a credit-card debt. They also learn that credit can be their best friend. Working in small groups, they consider seven scenarios and decide in each case whether it would be wise for the people involved to use credit. They discuss their...
Grade(s): 6-8, 9-12
Concepts: Choice, Costs and benefits, Credit, Debt, Interest, Revolving credit

Unit 2: Lesson 4 - How Can I Make Decisions About My Future?
Choices and Changes: In Life, School, and Work - Grades 5-6 - Teacher's Resource Manual
In the mid-1700s thousands of Europeans traveled to North America seeking adventure, freedom, and economic opportunity. The risk of deciding to travel across the Atlantic Ocean in a wooden ship was great, but the potential rewards were even greater.
Grade(s): 5.6
Concepts: Alternative, Benefit, Choice, Cost, Emigrate, Immigrate, Indenture, Primogeniture, Risk,

Lesson 6 - How Much is That Bike?
Mathematics & Economics: Connections for Life - 6-8
This lesson demonstrates the utility of percentages in comparing fractions of unequal size; it also provides students with practice in using percent to calculate simple interest. Students are introduced to the idea of buying on credit and the additional resources required to service the debt. The concept of costs and benefits is examined as students compare the additional costs of borrowing money ...
Grade(s): 6-8
Concepts: Interest, Interest rate, Cost/benefit analysis, Costs, Benefit, Choice

Lesson 21 - Lessons from History: Stock Market Crashes
Learning, Earning and Investing: High School
The students analyze information about the stock market crash of 1929 and the stock market crash of 1987. They use the information to make posters about the crashes, highlighting what happened during and after the crashes, causes of the crashes and the role of the Federal Reserve in each crash. After presenting their posters to the class, the students discuss similarities and differences between t...
Grade(s): 6-8, 9-12
Concepts: Causes and effects of the stock market crash of 1929, Causes and effects of the stock market crash of 1987, Federal Reserve, Monetary policy, Supply and demand

Lesson 8 - How to Buy and Sell Stocks and Bonds
Learning, Earning and Investing: High School
In this lesson the students learn about the financial markets in which stocks and bonds are bought and sold. They read about the high transaction costs that individual investors would experience if there were no financial markets. They perform a play that illustrates how an individual stock transaction is made in an organized financial market. Finally, the students discuss the options available fo...
Grade(s): 6-8, 9-12
Concepts: Bond, Broker, Dividend reinvestment plan (DRIP), Financial markets, Investor, Stocks

Lesson 10 - The Language of Financial Markets
Learning, Earning and Investing: High School
The students work in small groups to make flash cards to display terms commonly used in financial markets. The terms are grouped in five categories: Buying and Selling in the Market; Exchanges and Indexes; People in Financial Markets; Stocks, Bonds and Mutual Funds; Technical Terms. Each group of students begins by learning the terms in one category. Then the students pass their flash cards from g...
Grade(s): 6-8, 9-12
Concepts: Bonds, Mutual funds, Securities indexes, Stocks

ONLINE LESSONS:

online Climbing the Savings Mountain
Students discover how saving money can be compared to a mountain climb. The climb can be fast or slow, safe or hazardous, scenic or thrilling. You will find out that there is more than one way to get to the top!
Grade(s): 6-8
Concepts: Banking,Inflation,Interest Rate,Borrower,Deflation,Interest,Savings,Savers

online Calculating Simple Interest
How do banks calculate the amount of interest paid on a loan? In this lesson, students will view a Livescribe Pencast to learn how to find the dollar amount in interest that is due at maturity. This lesson uses different time periods such as days, months, and years in the calculation as well as varying interest rates.
Grade(s): 6-8, 9-12
Concepts: Interest Rate,Interest,Principal,Simple Interest

online Saving and Investing Blitz
The Saving and Investment Blitz engages the student in a series of timed questions that will test their understanding of saving and investment as well as their ability to perform calculations related to the time value of money.
Grade(s): 6-8, 9-12
Concepts: Saving, Investing, Interest rate

online A Penny Saved is a Penny at 4.7% Earned
There are lots of ways to receive income, and lots of ways to spend it. In this EconomicsMinute you will develop two budgets, or plans, to help you decide how to allocate your income. Assuming you do not love making dollar bill rings.
Grade(s): 6-8
Concepts: Banking,Budget,Choice,Decision Making,Income,Interest Rate,Opportunity Cost,Trade-off,Savings

online Work, Earnings and Economics: Using 'Lyddie' by Katherine Paterson
To get started, the students will read Lyddie, a novel by Katherine Paterson. The novel is set mainly in Lowell, Massachusetts, in the 1840s. In Lowell the main character, 13-year-old Lyddie Worthen, works six days a week, from dawn until dusk, running weaving looms in a murky dust-and lintfilled factory, trying to save enough money to reunite her family. In reading and discussing this fine nov...
Grade(s): 6-8
Concepts: Budget,Choice,Decision Making,Economic Freedom,Economic Growth,Economic Wants,Human Resources,Incentive,Money Management,Opportunity Cost,Role of Government,Scarcity,Technological Changes,Borrower,Interest,Labor,Labor Union,Market Economy,Money,Resources,Special Interest Group,Standard of Living,Wants,Wage,Regulation,Savings,Savers

online Time Value of Money
Suppose your brother or sister owed you $500. Would you rather have this money repaid to you right away, in one payment, or spread out over a year in four installment payments? Would it make a difference either way?
Grade(s): 6-8, 9-12
Concepts: Interest Rate

online Getting and Using a Credit Card
Students will read the "Credit Counselor" guide to learn about the costs and benefits of credit cards; the C's of credit; credit history; credit application evaluation; and become familiar with some useful formulas. They will need to complete the reading in order to make the best choice from a series of credit profiles and to answer a series of questions during the simulation.
Grade(s): 6-8, 9-12
Concepts: Credit, Interest rate

online It Pays to Stay in School
This lesson examines some of the incentive programs being offered to keep students in school
Grade(s): 6-8
Concepts: Choice,Incentive,Human Capital,Investment

online Building a Better Budget
This lesson uses the Better Money Habits video How to Set a Budget and Stick to It to reinforce the concepts of budgeting introduced in Lesson 7: Managing Cash in Financial Fitness for Life, Grades 6-8.
Grade(s): 6-8
Concepts: Budget,Planned Spending,Savings,Unplanned Spending,Fixed Expenses,Goal

online Meeting Financial Goals
In this lesson, students learn several basic steps to help them understand the importance of saving to meet future personal financial goals.
Grade(s): 6-8
Concepts: Decision Making,Alternative,Savings

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