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Topic: Interest rate 

Economics

 Standard 7.  Understands savings, investment, and interest rates
  Level IV (Grade 9-12)
   Benchmark 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
    Knowledge/skill statements
     1.Knows the meaning of "interest rate"
     2.Understands that interest rates are determined by the forces of supply and demand
   Benchmark 2.Knows that the real interest rate is the nominal or current interest rate minus the expected rate of inflation
    Knowledge/skill statements
     1.Knows how to calculate the real interest rate
     2.Knows that current interest rate is another name for nominal interest rate
     3.Knows the meaning of "nominal (current) interest rate"
     4.Knows the meaning of "expected rate of inflation"
   Benchmark 3.Understands that higher interest rates provide incentives for people to save more and to borrow less, and vice versa
    Knowledge/skill statements
     1.Understands how higher interest rates affect saving and borrowing
   Benchmark 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
    Knowledge/skill statements
     1.Knows that real interest rates are normally positive
     2.Understands why real interest rates are normally positive
   Benchmark 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
    Knowledge/skill statements
     1.Understands that riskier loans command higher interest rates than safer loans
     2.Understands that riskier loans have a greater chance of default on the repayment of the loan
     3.Knows the difference between a risky loan and a safe loan
   Benchmark 6.Understands that higher interest rates reduce business investment spending and consumer spending; thus, policies that raise and lower interest rates can affect spending
    Knowledge/skill statements
     1.Understands how interest rates affect business investment spending and consumer spending
     2.Understands that policies that raise or lower interest rates can affect spending
   Benchmark 7.Understands that expectations of increased inflation may lead to higher interest rates
    Knowledge/skill statements
     1.Knows that expectations concerning inflation can affect interest rates
 Standard 8.  Understands basic concepts of United States fiscal policy and monetary policy
  Level IV (Grade 9-12)
   Benchmark 9.Understands that changes in the money supply lead to changes in interest rates and in individual and corporate spending which may influence the levels of spending, employment, prices, and economic growth in the economy
    Knowledge/skill statements
     1.Understands that changes in the money supply lead to changes in interest rates
     2.Understands that changes in the money supply lead to changes in individual and corporate spending
     3.Understands that changes in the money supply may influence the levels of spending in the economy
     4.Understands that changes in the money supply may influence the levels of employment in the economy
     5.Understands that changes in the money supply may influence the levels of prices in the economy
     6.Understands that changes in the money supply may influence the levels of economic growth in the economy