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Virtual Economics

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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 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 14: Borrowing decisions and expected returns
Master Curriculum Guide: Economics and Entrepreneurship
Entrepreneurs must possess or have access to funds to start their businesses. They may use their own funds; get others to give them funds for a share of the business and claims on future profits (equity financing); or they may borrow money from others (debt financing) with the contractual obligation to pay back the amount of money borrowed plus additional dollars called interest payments.
Grade(s): 9-12
Concepts: Interest, Interest Rates, Investment, Expected Returns,

Unit 6: Lesson 15 - Halloween Treats and Nonrenewable Resources
Economics and the Environment
Students are introduced to the "when" question with a Halloween variation of the "cake-eating" problem. The snacks described in the problem are then used to demonstrate how a market for a nonrenewable resource works.
Grade(s): 9-12
Concepts: Nonrenewable Resources, Assets, Interest Rate, Price, Rate-of-return, Capital Gain,

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 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

Lesson 14 - Savings and Personal Investments: If You're So Smart, Why Aren't You Rich?
Personal Decision Making: Focus on Economics
Students view a transparency showing the difference between economics definitions and personal finance definitions of the terms capital and investment. They read and discuss a handout listing four basic rules for wise investment decisions.
Grade(s): 9-12
Concepts: Capital, Investment, Savings, Opportunity cost, Securities, Stocks, Bonds, Mutual funds, Savings accounts, Certificates of deposit, Risk versus return, Liquidity,

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 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 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

Lesson 7: Why Middlemen Matter: The Role of Financial Institutions in a Market Economy
From Plan to Market: Teaching Ideas for Social Studies, Economics, and Business Classes
Students participate in a simulation and analyze two case studies emphasizing the importance of the development of financial institutions in the transition economies.
Grade(s): 9-12
Concepts: Banks, Financial Institutions, Interest Rates, Investment, Search Costs, Middlemen

Lesson 17: Saving, Investing, and the Invisible Hand
Focus: High School Economics
This lesson explains how financial institutions in a market economy channel savings into economic investments. How much people save and how effectively those savings are transformed into good investments are directly related to a nation's economic growth. Historically, economic growth has been the primary way market systems reduce poverty and raise standards of living. Economic growth results f...
Grade(s): 9-12
Concepts: Saving, Investment, The stock market, The bond market, Primary and secondary markets for financial securities, Banks, Circular flow, The 'invisible hand',

Lesson 7: The Money Maze
Economies in Transition: Command to Market
In this lesson, students use "greenbacks" to purchase the spring for a ballpoint pen from the teacher. They are required to use the pen to complete a worksheet. In order to purchase the spring, they must find someone in the school who will lend them "greenbacks." Students then learn about the importance of financial markets and the lack of these markets in many transition economies.
Grade(s): 9-12
Concepts: Financial Intermediaries, Financial Capital Market, Capital, Investment

Lesson 4: Financial Systems
Focus: Institutions and Markets
Students participate in a brief simulation to demonstrate the important role financial intermediaries play in promoting investment and economic growth in market economies. Through direct instruction, students learn some specialized terms related to financial markets. Then students participate in an activity to help them identify other financial institutions in a market economy.
Grade(s): 9-12
Concepts: Saving, Investment, Financial institutions, Interest rate, Financial/personal investment, Primark market, Secondary market, Economic growth, Technological change,

Lesson 1: What Is an Entrepreneur?
Entrepreneurship in the U.S. Economy: Teacher Resource Manual
In this lesson, students will define entrepreneurship; describe entrepreneurial attributes demonstrated by successful entrepreneurs; and, compare personal attributes with attributes generally common to successful entrepreneurs.
Grade(s): 9-12
Concepts: Entrepreneur, Entrepreneurship, Innovative, Maximize, Business firms, Human capital, Labor, Profit

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 4 - What Is a Stock?
Learning, Earning and Investing: High School
The students work in small groups that represent households. Each household answers mathematics and economics questions. For each correct answer, a household earns shares of stock. At the end of the game, the groups that answered all questions correctly receive a certificate good for 150 shares of stock in The Economics and Mathematics Knowledge Company. They also receive dividends based on their ...
Grade(s): 6-8, 9-12
Concepts: Dividend, Income, Saving, Stocks, Stockholders

Lesson 5 - Reading the Financial Pages: In Print and Online
Learning, Earning and Investing: High School
The students learn how to read and understand information presented in the financial pages of newspapers and online sources. Working in pairs, they examine entries for stocks, mutual funds and corporate bonds. They participate in a scavenger hunt for financial information, using a local newspaper. They learn how to follow stocks online.
Grade(s): 6-8, 9-12
Concepts: Closing price, Dividend, Net asset value, Percentage change in fund value, Price/earnings ratio (P/E ratio), Stock symbol, Trading volume, Yield

Unit 6: Lesson 36 - Should We Worry About the National Debt?
Capstone: Exemplary Lessons for High School Economics - Teacher's Guide
Students discuss the size of the current national debt and what this means. A class discussion covers the causes of the debt, how it is financed, definitions of a budget deficit and budget surplus, and the difference between a budget deficit and a trade deficit. Students then participate in an activity presenting different perspectives on whether the national debt is a problem of major concern.
Grade(s): 9-12
Concepts: Bonds, Budget deficit, Budget surplus, National (public) debt

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

ONLINE LESSONS:

online Buy and Hold: A Stock Market Simulation
Students will participate in a brief activity as well as direct instruction that explains the purpose of stocks and bonds from both a corporate and investor perspective. Then they will work in groups to make investment decisions in a structured stock market game set in January 2000. Students will analyze the performance of their investment portfolios over a decade and evaluate their gains and loss...
Grade(s): 9-12
Concepts: Firms,Bond,Dividend,Rate of Return,Stock,Corporation

online Earning Credit
Students participate in a series of activities that provide them with a simulated credit score and an auto loan interest rate based on their credit score. Then they learn to use compound interest and amortization schedules to calculate the real cost of buying a car, and they compare the total cost of buying a car for individuals with high and low credit scores. At the conclusion, students have a s...
Grade(s): 9-12
Concepts: Credit,Interest Rate,Risk,Compound Interest,Credit Report,Principal,Simple Interest

online Here's Your Chance to Make Millions in the Stock Market (Part 3)
In Part III of this lesson, students will have the opportunity to complete an interactive exercise that will take them on a historical tour of the stock market from Post WWII through the year 2001. Students will learn the difference between a buy and hold vs market timing strategy as it relates to investing. Part III of this exercise is a continuation of Part II which took the student thro...
Grade(s): 9-12
Concepts: Decision Making,Economic Efficiency,Investing,Markets,Stock Market

online Here's Your Chance to Make Millions in the Stock Market (Part 2)
In Part II of this lesson, students will have the opportunity to complete an interactive exercise that will take them on a historical tour of the stock market from 1920 until just after WWII. Students will learn the difference between a buy and hold vs market timing strategy as it relates to investing. Part III continues this interactive exercise by taking the student on a historical stock...
Grade(s): 9-12
Concepts: Decision Making,Economic Efficiency,Investing,Markets,Price,Stock Market

online NYSE Made Easy Lesson Plan
This lesson will help students to understand the terms that are associated with the New York Stock Exchange. It will also help students to read a stock market report found in any major newspaper or online.
Grade(s): 9-12
Concepts: Investing,Stock Market

online What is a Stock?
The students work in small groups that represent households. Each household answers questions about stocks and stock markets. For each correct answer, a household earns shares of stock. At the end of the game, the groups that answered all questions correctly receive a certificate good for 150 shares of stock in The Stock Knowledge Company. They also receive dividends based on their shares. Those w...
Grade(s): 9-12
Concepts: Income,Saving,Capital Gain,Dividend,Mutual Fund,Stock

online Here's Your Chance to Make Millions in the Stock Market (Part 1)
In this lesson students will learn about the impact that efficient markets have on attempting to correctly time the stock market, as well as how investing in stocks should have long-term investment goals. Part I begins by having students read and discuss a story. A small exercise is included which demonstrates that predicting what a stock does next is not so easy. Parts II and III takes th...
Grade(s): 9-12
Concepts: Decision Making,Economic Efficiency,Investing,Markets,Price,Stock Market

online Taxation and the National Debt
ESSENTIAL DILEMMA Is there a fair and efficient way to fund and maintain the public services we want?
Grade(s): 9-12
Concepts: Budget,Budget Deficit,Incentive,Taxation,Costs,Investment,Debt,Utility,Capital Gain,Revenue

online Timing Is Everything
In the first part of the lesson students examine the incentives and opportunity costs of spending and saving in a teacher directed lesson. The remainder of the lesson is an interactive web site. Students work through problems that demonstrate the power of compound interest.
Grade(s): 9-12
Concepts: Incentive,Interest Rate,Opportunity Cost,Interest,Savings

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

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