How the Economy Works and Can Impact You – and the Environment

There are many things that impact the many financial decisions that we make but one of the most significant factors is the economy – the economic events and realities that change over time. As things in the economy change, the opportunities for jobs can change, the opportunities for earning income can change, prices can change, interest rates can change, the goods and service available may change, the opportunities for setting up a business can change, housing markets change, the international value of our money can change  – and so on. All these kinds of changes can impact people – families and communities. It is important for youth to have a basic understanding of how the economy works, who the key players are, and the factors that can lead to change in our economy and impact their lives and decisions. Economic activity is also a major factor impacting the environment. It can affect the environment in negative ways – and in positive ways. Youth should have an opportunity to explore both possibilities – and think about ways that their own economic and financial decisions can have a positive effect on the environment.

Please Note: Teaching Units provided are for support and consideration by teachers and are not prescriptive.

Learning Map and Supports for Instruction

The “Learning Map” identifies teaching opportunities in Alberta’s curriculum for each topic and you will find them as part of the Support Teaching Materials provided here. Teachers can, of course, integrate the target areas of financial knowledge, skills, attitudes, and behaviours anywhere they can find a fit. The Supports for Instruction provide videos, animations, and links to other resources to support teachers in their efforts to improve the financial literacy of their students.

The Economy and Economic Citizenship - Division IV: Gr. 10-12

Knowledge

  • An economy’s role is to use available resources to produce and distribute products and services needed and wanted by consumers

  • Every economy has to decide how to answer the three basic economic questions: 1. What to produce, 2. How to produce, 3. How to distribute what is produced

  • Countries have different types, and quantities, of resources

  • Businesses are set up by entrepreneurs to combine and use resources to produce products and services consumers will buy

  • Consumers influence what businesses produce by what they are willing to buy (consumer sovereignty)

  • Businesses that produce well, and produce what consumers will buy, can make a profit and succeed

  • Production of products and services must abide by regulations and laws protecting consumers

  • Various markets exist and the forces of demand and supply will impact prices in those markets (e.g., product markets, labour markets)

  • The various sectors of the economy – businesses, consumers, government, financial institutions, and the foreign sector (Canada’s relationship with other countries)

  • Countries engage in trade and through trade both countries can become better off after trade

  • Examples of Canadian imports and exports and countries with which we do the most trade

  • People determine those who govern them by voting in a democracy and voting is an important responsibility

  • Examples of goods and services provided by governments and why governments provide certain goods and services (e.g., roads, bridges, schools, hospitals, etc.)

  • How governments pay for goods and services provided through taxes and examples of taxes that people pay

  • Inflation and the importance of keeping inflation under control and how it impacts the purchasing power of money

  • How people and governments can help others in need

  • Concept of the business cycle and how policies can impact periods of growth and contraction in the economy – e.g., changing interest rates or government spending or taxes

  • How financial institutions function as intermediaries to channel savings into investments that can enable economic growth and improvement

  • Investment is key to making improvements in our economy

  • Investments in people, equipment, capital, and other resources contribute to growth, innovation and employment

  • Factors affecting the level of production and employment in an economy

  • Key statistics used to assess how an economy is performing

  • Concept of “economic sustainability”

  • Concept of renewable and non-renewable resources

Skills

  • How to follow economic events and realities that could impact their current or future financial decisions

  • How to monitor possible changes in the level of economic activity that may lead to changes in interest rates that can impact loans, prices, jobs, etc.

  • Follow key legitimate news sources to gain economic knowledge and insight

  • Assess how international events might impact Canada’s economy and potentially their personal situation

  • How economic events and realities may impact their employment or job prospects

  • How changes in government policies might impact personal taxes

  • How to complete and file a personal tax return

  • Change money of one country into the money of another country

  • Debate, discuss, and evaluate economic policies and actions proposed by the government and different political parties

  • Generate ideas to help sustain and improve the environment

  • Live, work, and play in ways that help sustain and possibly improve the environment

  • Consider careers that involve helping to sustain and improve the environment

Attitudes/Behaviours

  • Monitor economic news and events that could impact their personal situation (e.g., job, prices, interest on loans)

  • Monitor credible news sources to obtain economic information and insight

  • Monitor economic policy positions of political parties to know what can be expected if the party is elected

  • Monitor international economic events that could impact Canada and possibly one’s personal situation

  • Make good financial decisions based on credible economic information (e.g., longer-term mortgage agreement if higher interest is foreseen)

  • Support economic activity, and undertake personal decisions and actions, that can have a positive impact on the environment

  • Take an interest in government and how policies of different political parties could affect their lives

  • When of age, be a responsible voter to support their preferred government and economic policies

  • Have a sense of personal responsibility when making decisions and how their decisions may impact others

  • Have a sense of compassion for the needs and circumstances of others