High Emphasis

Economics: Government and Economics 

• Identify and evaluate the benefits and costs of alternative public policies, and assess who enjoys the benefits and who bears the costs. 

• Identify some public policies that may cost more than the benefits they generate, and assess who enjoys the benefits and who bears the costs. Explain why the policies exist.

• Interpret media reports about current economic conditions and explain how these conditions can influence decisions made by consumers, producers, and government policy makers.

• Make informed decisions by anticipating the consequences of inflation and unemployment.

• Anticipate the impact of federal government and Federal Reserve System macroeconomic policy decisions on themselves and others. 

Economics: Microeconomics 

• Identify markets in which people participate as a buyer and as a seller and describe how the interaction of all buyers and sellers influences prices. Also, predict how prices change when there is either a shortage or surplus of the product available. 

• Predict how changes in factors such as consumers’ tastes or producers’ technology affect prices.

• Explain how changes in the level of competition in different markets can affect price and output levels.

• Describe the roles of various economic institutions and explain the importance of property rights in a market economy. 

Medium Emphasis

Economics: Macroeconomics 

• Identify the risks and potential returns to entrepreneurship, as well as the skills necessary to engage in it. Understand the importance of entrepreneurship and innovation to economic growth, and how public policies affect incentives for and, consequently, the success of entrepreneurship in the United States. 

• Explain how people’s lives would be more difficult in a world with no money, or in a world where money sharply lost its value. Predict the consequences of investment decisions made by individuals, businesses, and governments.

• Predict future earnings based on someone’s current plans for education, training, and career options. 

Economics: Basic Economics 

• Identify what people gain and what they give up when they make choices. 

• Make effective decisions as consumers, producers, savers, investors, and citizens.

• Identify incentives that affect people’s behavior and explain how incentives affect their own behavior.

• Evaluate different methods of allocating goods and services, by comparing the benefits to the costs of each method. 

Low Emphasis

Economics: Trade and International Politics. 

From tasctest.com:

• The TASC test emphasizes the targets for social studies that appear most frequently on state standards for the specified domains, as indicated by the categories in the below “High Emphasis” category. 

• Concepts in the “Medium Emphasis” items will be fully assessed within the TASC test as well, though there will be fewer questions aligned to these standards. 

• The “Low Emphasis” category will have no more than one or two items on any given test.  

Key Components in Economics

Scarcity

Productive resources are limited. Therefore, people cannot have all the goods and services they want; as a result, they must choose some things and give up others. 

Decision Making

Effective decision making requires comparing the additional costs of alternatives with the additional benefits. Many choices involve doing a little more or a little less of something: few choices are “all or nothing” decisions. 

Allocation

Different methods can be used to allocate goods and services. People acting individually or collectively must choose which methods to use to allocate different kinds of goods and services.

Incentives

People usually respond predictably to positive and negative incentives. 

Trade

Voluntary exchange occurs only when all participating parties expect to gain. This is true for trade among individuals or organizations within a nation, and among individuals or organizations in different nations.  

Specialization

When individuals, regions, and nations specialize in what they can produce at the lowest cost and then trade with others, both production and consumption increase.  

Markets and Prices

A market exists when buyers and sellers interact. This interaction determines market prices and thereby allocates scarce goods and services. 

Role of Prices

Prices send signals and provide incentives to buyers and sellers. When supply or demand changes, market prices adjust, affecting incentives. 

Competition and Market Structure

Competition among sellers usually lowers costs and prices, and encourages producers to produce what consumers are willing and able to buy. Competition among buyers increases prices and allocates goods and services to those people who are willing and able to pay the most for them. 

Institutions

Institutions evolve and are created to help individuals and groups accomplish their goals. Banks, labor unions, markets, corporations, legal systems, and not-for-profit organizations are examples of important institutions. A different kind of institution, clearly defined and enforced property rights, is essential to a market economy.

Money and Inflation

Money makes it easier to trade, borrow, save, invest, and compare the value of goods and services. The amount of money in the economy affects the overall price level. Inflation is an increase in the overall price level that reduces the value of money. 

Interest Rates

Interest rates, adjusted for inflation, rise and fall to balance the amount saved with the amount borrowed, which affects the allocation of scarce resources between present and future uses.

Income

Income for most people is determined by the market value of the productive resources they sell. What workers earn primarily depends on the market value of what they produce. 

Entrepreneurship

Entrepreneurs take on the calculated risk of starting new businesses, either by embarking on new ventures similar to existing ones or by introducing new innovations. Entrepreneurial innovation is an important source of economic growth. 

Economic Growth

Investment in factories, machinery, new technology, and in the health, education, and training of people stimulates economic growth and can raise future standards of living. 

Role of Government in Market Failure

There is an economic role for government in a market economy whenever the benefits of a government policy outweigh its costs. Governments often provide for national defense, address environmental concerns, define and protect property rights, and attempt to make markets more competitive. Most government policies also have direct or indirect effects on peoples’ incomes.

Government Failure

Costs of government policies sometimes exceed benefits. This may occur because of incentives facing voters, government officials, and government employees, because of actions by special interest groups that can impose costs on the general public, or because social goals other than economic efficiency are being pursued.  

Economic Fluctuations

Fluctuations in a nation’s overall levels of income, employment, and prices are determined by the interaction of spending and production decisions made by all households, firms, government agencies, and others in the economy. Recessions occur when overall levels of income and employment decline.  

Unemployment and Inflation

Unemployment imposes costs on individuals and the overall economy. Inflation, both expected and unexpected, also imposes costs on individuals and the overall economy. Unemployment increases during recessions and decreases during recoveries

Fiscal and Monetary Policy

Federal government budgetary policy and the Federal Reserve System’s monetary policy influence the overall levels of employment, output, and prices.