ecpnomics 601

StepsThis activity has three parts. Make sure you read on for details to complete them all!Part One: Choose 

Identify an economic issue that is important in your community. These are some examples:

06.01 Environmental Policy TopicsThe list below includes some topics that you may want to consider for your Module Six Project. Please keep in mind that your topic must be relevant to your local community. You are not limited to this list. Follow the steps and recommendations in the lesson to help you decide which topic to pursue.Economic Policy AreasSpecific Topic IdeasTransportationConstructing and managing a high-speed rail system, 

expanding existing roads and highways, 

adding public bus system

EnergyBuild nuclear power plant, 

require new homes and buildings to install solar energy panels, 

renovate city buildings to be more 

energy efficient

EducationBuild a four-year university, 

allow building of charter schools, 

create dropout prevention program, 

build after-school youth center

HousingDrain wetlands to build new neighborhood, 

build new apartment complex in central part of city

WaterBuild new water treatment plant, 

upgrade sewage system throughout city

JobsOffer lower taxes to attract new businesses, 

create job training program for jobs in demand locally

Law EnforcementHiring additional police officers, 

installing “red light camera” system, 

increasing fines for traffic or 

other minor offenses, build a new jail, 

expand crime prevention education efforts

Part Two: Research

Learn more about how this issue affects your community. You may choose to contact a local leader such as a member of your city or county council or representative from an a related citizen interest group. Consult an online phone book or community website for contact information. Use the Research Chart to document your data, take notes, and track your sources of information.

Part Three: Construct 

Construct a circular-flow diagram for a business or industry in your community. Diagram the flow of goods, services, and money from your chosen industry to the various sectors of the local and world economy. For example, a factory in your community creates jobs and products. The income to the households creates spending in the economy as people consume products, invest, and pay taxes to the government.

Use the Research Chart to document how this business or industry's activities affect the various sectors of the local and world economy.Submit both the diagram and the chart in assessment 6.01. -A circular-flow diagram shows the flow of resources between four main players in the economy—households, businesses, the government, and the rest of the world.

An example of a circular flow diagram would be:

PlayerTourism ExampleCars ExampleIndividuals and Households

(productive resources)

Individuals in households earn money from jobs related to tourism. They spend this money in the product market. Money is sent to the government in the form of taxes. Financial institutions, such as banks, receive deposits from individuals.Individuals seek credit from financial businesses to purchase cars from dealerships. They earn money from working in factories, car dealerships, government, and banks.Businesses

(capital investment)

Businesses sell products and take in money from tourists. Businesses in turn pay taxes to the government and invest in new resources (land, labor, capital). Money is invested in the financial markets and businesses sell stock to raise capital.Car manufacturers create cars for dealerships, who sell them to individuals and businesses. For example, an electric company purchases trucks to transport workers and tools to buildings and power substations.

Government 

(taxes and regulation)

The government takes in revenue from the tourists spending money (sales tax). The government collects other taxes such as income taxes, property taxes, and revenue taxes. The government uses this money to hire workers, purchase products, and support various programs. Governments purchase cars to transport political leaders, police officers, and other government personnel. The government taxes the income of businesses and individuals, and can change interest rates for credit services.The Rest of the World

(import/export markets)

Businesses related to tourism import products from foreign countries to sell to tourists. Foreign countries invest by buying stock in businesses related to tourism.Car manufacturers export cars to other countries for sale, and sometimes build factories in other countries. The importing country's government may place a tariff on the foreign cars and parts.

Now complete this research chart:

06.01 Research ChartUse the chart below to guide your research. Answer the questions presented for the issue you have chosen. Be sure to take notes, including the sources of information.

06.01 Research Notes

SubjectGuiding QuestionsYour ResponsesDefine the situation or problem

1. Explain how the issue you have chosen affects your community. Be sure to include impacts you perceive to be both positive and negative.
2. What do members of your family and community say about the issue?

 Construct a circular-flow diagram that incorporates effects of your chosen issue on economic products and various sectors of the economy. 

Based on your diagram, answer the following questions including positive and negative effects on each economic sector.

1. How does this issue affect households and local residents?
2. How does this issue affect area businesses?
3. How does this issue affect our government at the local, state, and national levels?
4. How does this issue affect the rest of the world?
5. How does the issue affect resources, goods and services, and finances?

 

 Print

You may use any online resource to make the circular flow diagram such as this one:

Circular-flow Diagram Worksheet

quick summary of what you need to do:

The work contains all of the following required elements:

• circular-flow diagram
• research notes chart
• research and diagram focus on the specific issue