Household management involves using resources wisely and being thrifty to stay within a budget. The word “economy” comes from the Greek word for household management, oikonomia. This management is difficult when people have too little money to buy what they need, which was the case for many after the stock market crashed in 1929. In an effort to make sense of what was going on, members of the U.S. government began to talk about what they called “the economy,” and they developed methods to quantify the situation and account for economic fluctuations. Listen to the story to learn more about the invention of what we call the economy and some of the means by which we measure its strength.
Story Length: 4:30
Socrative users can import these questions using the following code: SOC-1234
Fact, Question, Response
Language Identification Organizer
Deeper Meaning Chart
What should the government spend its money on? With a growing national debt this has become an important question. Economists see the government’s role in providing goods and services to be one that fills a need. The government should pay for things that make our lives better but that the private market cannot or will not provide. Listen to this story from Planet Money to learn the reasons why government has decided to pay for public goods such as lighthouses and autopsies.
Read More
The Federal Reserve System is the central bank of the United States. It is responsible for the effective operation of the U.S. economy and conducts the nation’s monetary policy, stabilizes prices and moderates interest rates, and promotes the safety of individual financial institutions. In 1907, J. P. Morgan organized other leading financiers to backstop a run on banks and bring an end to a nationwide financial crisis. Later, with the encouragement of a powerful senator, a group of New York bankers went on to develop a plan for a central bank that was eventually adopted and that is still in effect today. Listen to the story to learn more about the formation of the Federal Reserve and America’s central banks by Congress.
Read More
Millions of people invest billions of dollars in the stock market to make their money grow. Some pool their money with other investors in high risk investment vehicles known as hedge funds. Hedge fund managers employ a variety of strategies with the goal of doing better than the stock market as a whole. The third richest person in the world, Warren Buffett, made a $1 million bet that he could beat the earnings of any hedge fund with his own investments in low-risk index funds. A hedge fund manager took him up on the challenge. Listen to the story to learn who is on his way to winning the bet and why.
Note: At the end of the 10 year time period, Warren Buffett won the bet as the index funds outperformed actively managed hedge funds.
Read More
Food banks distribute billions of pounds of food each year throughout the United States to hungry children and adults. The Feeding America network is the nation’s largest organization working to end hunger. But it had a problem. The food banks were receiving large donations of food, but not necessarily the kinds of foods they needed. For example, one center received lots of pickles, but not enough produce. To solve this problem the Feeding America network created a market economy in order to distribute food among it’s food banks. Using fake money, the food banks created a market that assures better allocation of food across the distribution centers. Listen to the story to learn more about how market economics solved their allocation problem.
Read More