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Economics

Standard 7.Understands savings, investment, and interest rates
  Level Pre-K (Grade Pre-K)
   1. Not appropriate for this level
  Level I (Grade K-2)
   1. Not appropriate for this level
  Level II (Grade 3-5)
   1. Understands that savings is the part of income not spent on taxes or consumption  A 
  Level III (Grade 6-8)
   1. Understands that funds are channeled from savers to borrowers through banks.  A 
  Level IV (Grade 9-12)
   1. Knows that an interest rate is a price of money that is borrowed or saved and that interest rates are determined by the forces of supply and demand  A 
   2. Knows that the real interest rate is the nominal or current interest rate minus the expected rate of inflation
   3. Understands that higher interest rates provide incentives for people to save more and to borrow less, and vice versa  A 
   4. Understands that real interest rates are normally positive because people must be compensated for deferring the use of resources from the present into the future  A 
   5. Understands that riskier loans command higher interest rates than safer loans because of the greater chance of default on the repayment of risky loans  A 
   6. Understands that higher interest rates reduce business investment spending and consumer spending; thus, policies that raise and lower interest rates can affect spending  A 
   7. Understands that expectations of increased inflation may lead to higher interest rates
    

 A  = Assessment items available