Describe the circular flow of economic activity.
DefinitionDescription should include
- defining the terms household, firms, product market, factor market, factor payment, factors of production
- explaining the government’s role in economic activity
- explaining that a nation’s overall levels of income, employment, and prices are determined by the interaction of spending and production decisions made by individuals, businesses, and government
- understanding that one person's spending is another person’s income
- explaining the way in which resources, goods and services, and money flow among individuals, businesses, and governments in the market economy.
Related Standards of Learning
History and Social Science
The student will demonstrate skills for historical thinking, geographical analysis, economic decision making, and responsible citizenship by
- planning inquiries by synthesizing information from diverse primary and secondary sources;
- analyzing how political and economic trends influence public policy, using demographic information and other data sources;
- comparing and contrasting historical, cultural, economic, and political perspectives;
- evaluating critically the quality, accuracy, and validity of information to determine misconceptions, fact and opinion, and bias;
- constructing informed, analytic arguments using evidence from multiple sources to introduce and support substantive and significant claims;
- explaining how cause-and-effect relationships impact political and economic events;
- taking knowledgeable, constructive action, individually and collaboratively, to address school, community, local, state, national, and global issues;
- using a decision-making model to analyze the costs and benefits of a specific choice, considering incentives and possible consequences;
- applying civic virtues and democratic principles to make collaborative decisions; and
- communicating conclusions orally and in writing to a wide range of audiences, using evidence from multiple sources and citing specific sources.
Other Related Standards
Economics and Personal Finance Standards of Learning
The student will demonstrate knowledge of the role of producers and consumers in a market economy by
- describing how consumers, producers, workers, savers, investors, and citizens respond to incentives;
- explaining how businesses respond to consumer sovereignty;
- identifying the role of entrepreneurs;
- comparing the costs and benefits of different forms of business organization, including sole proprietorship, partnership, corporation, franchise, and cooperative;
- describing how costs and revenues affect profit and supply;
- describing how increased productivity affects costs of production and standard of living;
- examining how investment in human capital, capital goods, and technology can improve productivity;
- describing the effects of competition on producers, sellers, and consumers;
- explaining why monopolies or collusion among sellers reduces competition and raises prices; and
- illustrating the circular flow of economic activity.
The student will demonstrate knowledge of taxes by
- describing the types and purposes of local, state, and federal taxes and the way each is levied and used;
- exploring how tax structures affect consumers, producers, and business owners differently;
- computing local taxes on products and services;
- examining potential tax deductions and credits on a tax return;
- explaining the content and purpose of a standard W-2 form; and
- explaining the similarities and differences between state and federal taxation of inheritances.
FBLA Competitive Events and Activities Areas
Banking and Financial Systems
Business Financial Plan
The topic for this event changes from year to year. The annual topic may or may not correlate with this particular course. Please refer to the current Virginia FBLA State Handbook.