ROLE OF 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.
There are no Grade 8 benchmarks for this standard.
ROLE OF RESOURCES IN DETERMINING INCOME
Income for most people is determined by the market value of the productive resources they sell. What workers earn depends, primarily, on the market value of what they produce and how productive they are.
At the completion of Grade 8, students will know the Grade 4 benchmarks for this standard, and also understand:
Employers are willing to pay wages and salaries to workers because they expect to be able to sell the goods and services that those workers produce at prices high enough to cover the wages and salaries and all other costs of production.
To earn income people sell productive resources. These include their labor, capital, natural resources, and entrepreneurial talents.
A wage or salary is the price of labor; it usually is determined by the supply of and demand for labor.
More productive workers are likely to be of greater value to employers and earn higher wages than less productive workers.
People's incomes, in part, reflect choices they have made about education, training, skill development, and careers. People with few skills are more likely to be poor.
PROFIT AND THE ENTREPRENEUR
Entrepreneurs are people who take the risks of organizing productive resources to make goods and services. Profit is an important incentive that leads entrepreneurs to accept the risks of business failure.
At the completion of Grade 8, students will know the Grade 4 benchmarks for this standard, and also understand:
Entrepreneurs compare the expected benefits of entering a new enterprise with the expected costs.
Entrepreneurs accept the risks in organizing resources to produce goods and services because they hope to earn profits.
Entrepreneurs and other sellers earn profits when buyers purchase the product they sell at prices high enough to cover the costs of production.
Entrepreneurs and other sellers incur losses when buyers do not purchase the products they sell at prices high enough to cover costs of production.
In addition to profits, entrepreneurs respond to other incentives including the opportunity to be their own boss, the chance to achieve recognition, and the satisfaction of creating new products or improving existing ones. In addition to financial losses, other disincentives to which entrepreneurs respond include the responsibility, long hours, and stress of running a business.