Basic Economics

Basic Economics and Finance Lessons

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Lessons and worksheets for teaching, learning, and understanding basic economics and finance concepts.

Basic finance and economics provide a foundation for understanding important money management principles.

Teach and learn what is economics, time value of money, compound interest, opportunity cost, supply and demand, inflation, and other basic economic principles. Material also may be used to improve real-world math skills.

Use the following lessons to help teach and learn important economic and financial concepts.


Basic Economics Lessons

This material provides a foundation in basic economics and finance principles.


Lesson WHAT IS ECONOMICS?

What is Economics? Lesson Plan

An introduction to economics. Students learn the vocabulary of economics, what economics is, why we study it, and why it is important to our daily lives.


Lesson TIME VALUE OF MONEY

Time Value of Money - TVM

Time is Money! This lesson introduces students to a basic concept behind all types of investments, the Time Value of Money. Also introduces the concepts of Present Value and Future Value.

 

MAIN FUNCTIONS OF MONEY VIDEO LESSON

Main Functions of Money

Learn what is money and what are its four main functions. Money serves all these functions: it is a medium for exchange, store of value, unit of account, and standard for deferred payments. Instructional video lesson and worksheet.

 

Types of Money

What is money? Economists differentiate among several different types. Learn about the four main types including commodity money, representative money, fiat money, and bank money. Also learn why intrinsic value is important for understanding the types of money. Instructional video lesson and worksheet.


Lesson COMPOUND INTEREST

Compound Interest

A worksheet for a lesson in the concept of compound interest as it relates to the time value of money (TVM).

 

Lesson OPPORTUNITY COST

Opportunity Cost

We make many decisions every day. Should we go to work? Should we go shopping? In economics this is called opportunity cost.



Lesson SUPPLY AND DEMAND

Supply and Demand Introduction

A worksheet that introduces the concept of supply and demand.

 

Lesson LAW OF DEMAND

Law of Demand

Learn the law of demand, understand how it works, and create demand curves.


 

Lesson INFLATION INTRODUCTION

Inflation Introduction Lesson

A worksheet that introduces the concept of inflation.


WHAT IS CAUSING INFLATION?

What is causing Inflation? When will it end?

Why are prices going up for food, gas, and housing? Why are prices rising and who is it hurting? Why is everything so expensive? Learn about what is causing inflation. Includes video lesson and worksheet.

 

Lesson PRESENT VALUE

Present Value

Learn about the important financial concept of present value. Present value tells us how much the prospect of future income is worth in today’s dollars.


Lesson SIMPLE INTEREST

Simple Interest

Understand what simple interest is, and how it is calculated.


Lesson COMPOUND INTEREST

Compound Interest

Understand what compound interest is, how it is calculated, and appreciate the impact it makes on loans and investments.


Lesson MORTGAGES AND INTEREST

Mortgages and Interest

Understand the concepts of mortgages and compound interest.


Lesson ANNUITIES AND PERPETUITIES

Annuities and Perpetuities

Understand, define, and calculate annuities and perpetuities.


Lesson NET PRESENT VALUE (NPV)

Net Present Value (NPV)

Understand the concept of net present value (NPV) and how it is used to determine the value of future cash in today's dollars.


Lesson NPV VERSUS OTHER INVESTMENT MODELS

NPV versus Other Investment Models

Compare other investment models to NPV including payback period, discounted payback, average return of book value, Internal Rate of Return (IRR), discounted cash flow, profitability index, and benefit-cost ratio.


Lesson MODERN PORTFOLIO THEORY

Modern Portfolio Theory (MPT)

Understand modern portfolio theory. Topics include Markowitz theory, efficient portfolio, CAPM, and the relationship between risk and reward.


Lesson INTRO TO RISK, RETURN, AND OPPORTUNITY COST OF CAPITAL

Intro to Risk, Return, and Opportunity Cost of Capital

Understand risk, return, and opportunity cost of capital. Topics include investment portfolio, variance, standard deviation, and portfolio risk.


Lesson USING NPV TO MAKE INVESTMENT DECISIONS

Using NPV to make Investment Decisions

Understand how to decide which items to include in the cash flow analysis after tax corporate cash flow, and how to utilize limited capital.


Lesson DEMAND AND MARGINAL UTILITY

Demand and Marginal Utility

Understand the concept of demand, marginal utility, and diminishing marginal utility.


Lesson GOODS AND SERVICES: KEY ECONOMIC QUESTIONS

Goods and Services: Key Economic Questions

Understand the three economic questions that all societies must answer.


 

 

Additional Lessons

Introduction: Economic Reasoning

Learn about macroeconomics, basic principles, and concepts.


 

 

Informational Articles

Macroeconomics: A General Overview

Learn about macroeconomics, basic principles, and concepts.

 

Microeconomics: A General Overview

Learn about microeconomics, and basic micro concepts.

 

The Evolution of Money

The two theories which explain what money is.

 


 

 

 

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