Market economies are dependent on the creation and use of money to facilitate exchange. Such economies are therefore tied to the role of banks and financial institutions, the causes and effects of inflation, unemployment, and business cycles. Government actions such as taxation, spending, regulation, and fiscal policy also influence the operation of market economies. Understanding the interaction of these factors is essential to comprehending the function of market economies as a whole.

The complexity of the standard will increase at each succeeding grade cluster:

• K-3: Students will understand how barter, money, and other media are employed to facilitate the exchange of resources, goods and services.
  
  
• 4-5: Students will understand the role of banks and other financial institutions in the economy.
  
  
• 6-8: Students will analyze the role of money and banking in the economy, and the ways in which government taxes and spending affect the functioning of market economies.
  
  
• 9-12: Students will develop an understanding of how economies function as a whole, including the causes and effects of inflation, unemployment, business cycles, and monetary and fiscal policies.