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Virtual Economics

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Unit 3: Lesson 16 - Making Choices About Saving and Investing
Capstone: Exemplary Lessons for High School Economics - Teacher's Guide
This lesson introduces the distinction between savings and the investment. It demonstrates how the price of money --the interest rate--is critical to making the right savings and investment choices. It explains when, under various conditions, it is or is not in people's best interest to save.
Grade(s): 9-12
Concepts: Choice, Inflation, Interest, Investment, Loanable funds market, Purchasing power, Real interest, Savings

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

Section 6: The Basics of a Market Economy
Your Credit Counts Challenge: Trainer's Guide
Participants will identify the characteristics of people who build wealth. Participants will recognize the primary features of a market economy including voluntary exchange, private ownership, a price system, the profit motive, competition, and financial institutions.
Grade(s): 9-12
Concepts: Scarcity, Choice, Opportunity cost, Banking, Deposits, Withdrawals, Saving, Spending, Money,

Section 4: A Roof Over Your Head
Your Credit Counts Challenge: Trainer's Guide
Participants will understand the benefits and drawbacks of homeownership. Participants will understand the process of buying a home, from before house-hunting to closing and occupancy. Participants will understand the risks of speculating with money being saved toward a down payment and the risks presented by refinancing with predatory lenders.
Grade(s): 9-12
Concepts: Alternatives, Benefits, Costs, Choice, Decisions, Opportunity cost, Spending, Saving

Section 5: Strategies for Wealth Building
Your Credit Counts Challenge: Trainer's Guide
Participants will understand the concept of net wealth and how the decisions they make can cause their own net wealth to increase or decrease. Participants will explain why an early start in saving and investing increases a household's ability to build its wealth. Participants will understand that buying and holding financial assets leads to a greater long-term net wealth than frequent trading o...
Grade(s): 9-12
Concepts: Economic wants, Choices, Opportunity cost, Money, Spending, Saving, Savings accounts, Banks, Deposits, Withdrawals,

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

Unit 4: Lesson 9 - Weighing the Pluses and the Minuses: Benefit-Cost Analysis
Economics and the Environment
By analyzing a decision that may be very familiar to them -- studying versus playing a game -- students are introduced to the idea of weighing benefits and costs. The concepts are then applied to a case study of a typical environmental problem: emissions control.
Grade(s): 9-12
Concepts: Allocative Efficiency, Benefits, Costs, Net Value, Present Value, Benefit-Cost Analysis,

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

Lesson 15 - What Can Yesterday's Choices Tell Us about Tomorrow?
United States History: Focus on Economics
Students work in small groups to write brief speeches. Panelists present those speeches and then respond to questions from a student audience.
Grade(s): 9-12
Concepts: Incentives, Choice, Benefits and costs, Risk

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 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- The Great Tulip Boom
World History: Focus on Economics
The teacher displays a transparency comparing the prices of many goods in the 1600s in the Netherlands to prices paid for rare tulip bulbs during the Great Tulip Boom of the 1630s. Students perform a simulation of the boom and write a short essay expressing their personal feelings about the relationship between risk and rates of return.
Grade(s): 9-12
Concepts: Financial Investment, Rate of Return, Risk, Speculation

Lesson 1 - Why Insurance and How Does It Work?
Virtual Economics: Insurance Lessons
This lesson uses readings and group work to describe the risks that are a part of everyone's life. It then elaborates on five ways to handle risk. Two of these ways are to share and transfer risk, which is the purpose of insurance.
Grade(s): 9-12
Concepts: Avoiding risk, Decision making, Insurance, Opportunity cost, Premium, Probability, Reducing risk, Retaining risk, Risk, Sharing risk, Transferring risk,

Theme 3: Lesson 9 - There Is No Free Lunch in Investing
Financial Fitness for Life: Bringing Home the Gold - Grades 9-12 - Teacher Guide
Risk is inherent in all investments. In investing, there are risks you cannot control. However, other risks can be controlled. The key is to develop a risk-reward ratio with which you are comfortable. The higher the risk, the greater the potential reward. This is why there is no free lunch in investing. In this lesson, students learn about five types of risk and then compare the risks and re...
Grade(s): 9-12
Concepts: Money management, Real vs. Nominal, Risk, Investing, Savers, Saving, Investment

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,

Theme 1: Lesson 2 - The Economic Way of Thinking
Financial Fitness for Life: Bringing Home the Gold - Grades 9-12 - Teacher Guide
Lesson 2 introduces students to the economic reasoning process or the "economic way of thinking." Students reason through two situations, using The Handy Dandy Guide, a primer on economic reasoning.
Grade(s): 9-12
Concepts: Choice, Opportunity cost, Wants, Cost/benefit analysis, Decision making, Incentives

Theme 4: Lesson 11 - What Is Credit?
Financial Fitness for Life: Bringing Home the Gold - Grades 9-12 - Teacher Guide
Credit decisions are among the most important choices that young people will make. This lesson provides an overview of what credit is and some of the advantages and disadvantages of using credit. Students examine various types of loans including home mortgages, car loans, college loans, personal loans, and credit card loans.
Grade(s): 9-12
Concepts: Credit, Risk, Interest

ONLINE LESSONS:

online Pop Goes the Housing Bubble
In this lesson, students will learn about a speculative bubble within the context of the U.S. real estate market.
Grade(s): 9-12
Concepts: Credit,Decision Making,Incentive,Investment,Risk,Debt,Borrow,Asset,Collateral,Lender,Real Estate

online Business Ownership: The Franchise Option
Students explore an alternative to starting a business from scratch – investing in a franchise. They begin by considering the pros and cons of a franchise and whether this form of business is an option that would fit their personality and needs. Students then research and analyze franchise opportunities, ultimately selecting one that they think they might be able to successfully op...
Grade(s): 9-12
Concepts: Business,Choice,Decision Making,Entrepreneurship,Benefit,Costs,Legal Forms of Business,Risk

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 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 Mobile Phones Matter
Most high school students are comfortable using mobile phones. Many high school students use smartphones, such as iPhones, which are becoming part of our culture. It is also becoming more cost effective to use the broad range of smartphone services to cut down on other costs such as watches, games, and other accessory items. According to Maximilian Schmeiser of the Federal Reserve, the Center for ...
Grade(s): 9-12
Concepts: Banking,Budget,Choice,Cost/Benefit Analysis,Decision Making,Opportunity Cost,Trade-off,Benefit,Insurance

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 Transportation: They Say We Had a Revolution (Part 1)
Advancements in transportation have played a key role in the growth of our nation. U.S.government policies have also had a considerable impact on the development of transport as we know it today. In this series of three lessons,the students examine transportation and its impact on our nation (and vice versa) since the United States declared its independence in 1776. Lesson 1 focuses on improvement...
Grade(s): 6-8, 9-12
Concepts: Economic Growth,Incentive,Inventors,Markets,Non-price Determinants,Price,Role of Government,Specialization,Supply,Technological Changes,Costs,Determinants of Supply,Gains from Trade,Investment,Standard of Living,Transaction Costs,Innovation

online Transportation: They Say We Had a Revolution (Part 2)
Advancements in transportation have played a key role in the growth of our nation. U.S.government policies have also had a considerable impact on the development of transport as we know it today. In this series of three lessons, the students examine the advancements in automobiles, roads, airlines and airports.
Grade(s): 6-8, 9-12
Concepts: Exports,Gross Domestic Product (GDP),Incentive,Inventors,Markets,Price,Specialization,Technological Changes,Benefit,Costs,Imports,Investment,Profit,Innovation

online The Five Stages of Investing
The practice of saving and investing is definitely a good thing, but there are many ways to save and invest. In thinking about the options, it is important to consider the degree of risk involved and the potential for return. Typically, the higher the risk, the higher the potential return. The key is to work up to the riskier investments, where you stand to earn the most money, but only after you...
Grade(s): 9-12
Concepts: Cost/Benefit Analysis,Economic Security,Investing,Money Management,Benefit,Money

online Balancing the Federal Budget
ESSENTIAL DILEMMA When, if ever, should the nation prioritize balancing the federal budget?
Grade(s): 9-12
Concepts: Budget,Gross Domestic Product (GDP),Surplus,Trade-off,Investment,Debt,Expenses,Revenue

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