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Personal Finance Education Guide.Oregon state Dept. of Education, Salem.8180p.
EDRS PRICE MF01/PC04 Plus Postage.DESCRIPTOPS Adult Education: Behavioral Obiectives: Competence:
*Consumer Economics: *Consumer Education: *ConsumerProtection.: Credit (Pinancel: Economics: Emplovment:Tncome: Instructional Saterials: Learning Activf..tion:Legislation: Marketing: *Money Management;Purchasing
IDENTIFIERS *Consumer Skills: *Personal Finance Training
ABSTRACTThis guide is intended to assist curriculua planners
and classroom teachers in designing and implementing personal financeinstruction c meet a variety of student needs, interests, andabilities. It is organized under five concept areas: employment andincome, money manageeent, credit, purchase of goods and services, andrights and responsibilities in the marketplace. Each concept areacontains several subconcepts. Under each subconcept the goals arelisted at three levels of progressively greeter complexity along withsasple indicators of student performance. Classroom activities areaccompanied by an outline of program content. Topics covered in thefive concept areas include obtaining a lob: 'meting responsibilitiesfor iob success: employment law: financial security and employment:financial planning: banking and recordkeeping: savings; investments:let:Pa documents: insurance: taxation: credit availability, use,selection, and problems: consumer credit laws: factors affectingconsumer purchases: role of advertising: guidelines for shoppers: theU.S. economic system: rights and responsibilities of consumers andsellers: fraudulent and deceptive practices: sources of consumerassistance: and consumer legislation. (MNI
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PERSONAL FINANCEEDUCATION GUIDE
Spring 1981
Verne A. DuncanState Superintendent of
Public Instruction
Oregon Department of Education700 Pringle Parkway SE
Salem, Oregon 97310
U.S DEPARTMENT OF HEALTH.E DUCATION &WELFAREN ATIONAL INSTITUTE OF
EDUCATION
"PERMISSION TO REPRODUCE THISMATERIAL HAS BEEN GRANTED BY
THIS DOCUMENT HAS SEEN REPRO- S. J. Cava.-()DUCE EXACTLY AS RECEIVED FROMTHE PERSON OR ORGANIZATION ORIGIN-ATING IT POINTS OF VIEW OR OPINIONSSTATED DO NOT NECESSARILY REPRE-SENT OFFICIAL NATIONAL INSTITUTE Of TO THE EDUCATIONAL RESOURCESEDUCATION POSIT ION OR POLICY 1) INFORMATION CENTER (ERIC)."
L.
Federal law prohibits discrimination on the basis of race, color or national origin (Title VI of the Civil Rights Act of 1964); sex(Title IX of the Educational Amendments of 1972 and Title II of the Vocational Education Amendments of 1976); or handicap(Section 504 of the Rehabilitation Act of 1973) in educational programs and activities which receive federal assistance. Oregonlaws prohibiting discrimination include ORS 659.150 and 659.030. The State Board of Education, furthermore, has adoptedOregon Administrative Rules regarding equal opportunity and nondiscrimination: OARs 581-21-045 through -049 and OAR581-22-505.
It is the policy of the State Board of Education and a priority of the Oregon Depirtment of Education to ensure equalopportunity in all educational programs and activities and in employment. The Department provides assistance as neededthroughout the state's educational system concerning issues of equal opportunity, and has designated the following asresponsible for coordinating the Department's efforts:
Title IIVocational Education Equal Opportunity SpecialistTitle VIEqual Education and Legal SpecialistTitle IXAssociate Superintendent, Educational Program Audit Division and Equal Education and Legal SpecialistSection 504Specialist for Speech, Language and Hearing, Special Education Section
Inquiries may be addressed to the Oregon Department of Education, 700 Pringle Parkway SE, Salem 97310 or to the RegionalOffice for Civil Rights, Region X, 1321 Second Avenue, Seattle 98101.
Copyright 1981
3559219815000 3
it
contents
Foreword v
Acknowledgments vii
Introduction 1
Implementation 7
Assessment 11
Employment and Income 13
Obtaining a Job 14Meeting Responsibilities for Job Success 16
Employment Organizations 18Employment LawFederal and State 20
Money Management 23
Financial Security and Employment 24Financial Planning 26Banking and Recordkeeping 28Savings 30Investments 32
Insurance 34
Legal Documents 36Taxation 38
Credit 41
Availability and Use 42Credit Selection 44Credit Problems 46Consumer Credit Laws 48
Purchase of Goods and Services 51
Factors Affecting Consumer Purchases 52Role of Advertising 56Guidelines for Shoppers 58Making Specific Purchases 62
Rights and Responsibilities in the Marketplace 67
The U S Economic System 68Rights and Responsibilities of Consumers and Sellers 70Fraudulent and Deceptive Practices 72Sources of Consumer Assistance.. 74Consumer Legislation 76
111
foreword
Since the costs of transportation, utilities, housing and food continue to escalate at an unprecedentedrate, students must be able to make informed choices in managing their personal resources. For thisreason, the study of personal finance is of vital interest to everyone.
This Personal Finance Education Guide is intended to help students develop a framework forand "standing the day to day marketplace economy. The guide, as part of the ongoing effort to achieveexcellence in education, is designed so that teachers may tailor instructi m according to student needsand abilities. In this way, they will help students satisfy immediate needs, while encouraging theinvestigation of the more complex and subtle issues of consumer decisions.
The development of this guide represents the combined efforts of business, labor and others. Whilethey find themselves to be competitors in the marketplace, together they developed a documentspeaking to the diversity which is characteristic of the economy. It is this kind of involvement andcooperation, the community working together, that helps to achieve an L11 nnce for excellence ineducationproviding students with the best that education has to offer.
For further information, contact Marian Kienzle, Specialist, Consumer Education and PersonalFinance, 378-3816, or toll free in Oregon 1-800-452-7813.
Verne A. DuncanState Superintendent ofPublic Instruction
v
acknowledgments
This guide was revised through the efforts of business and industry, government, and labor represent-atives working with classroom teachers and university staff. Their purpose was to provide current andaccurate information needed by the consumer to function responsibly in the marketplace.
Particularly helpful was research conducted by Margaret Stamps ("An Analysis of the Acceptance andthe Conceptual Clustering of Personal Finance Competencies as Identified by the Business Commu-nity and Personal Finance Teachers," Oregon State University, 1979), and by Gregory Breuner ("ASurvey of Personal Finance Curriculum in Oregon Secondary Schools," Oregon State University,1978).
Special thanks to the Personal Finance Advisory Committee members, the Economics Education TaskForce, the Personal Finance Cadre, and the Consumer Protection Division of the Oregon Departmentof Justice, for advising and assisting during the revision process.
6vii
introduction
Preparing students to participate successfully in the United States economic system is a vital part ofbasic education. This publication presents guidelines to help schools develop a curriculum in personalfinance which meets student and community needs.
Financial concerns of consumers and the relationship to basic economic concepts are the focus of thisPersonal Finance Education Guide. Personal finance is the area of study that relates those basicconcepts and practices to the financial concerns of consumers. Economics, by way of contrast, isdefined as the study of how limited resources are allocated to meet unlimited needs and wants. InOregon, students are required to study in both content areas in order to earn a diploma.
This guide is intended to assist curriculum planners and classroom teachers in designing andimplementing personal finance instruction which meets a variety of students' needs, interests andabilities. It is organized under five concept areas (with corresponding program goals): employment andincome, money management, credit, purchase of goods and services, rights and responsibilities in themarketplace. Within each concept area are several sections, or subconcepts. Under each subconcept,such as Financial Planning, Aix course goals are listed at three levels of progressively greatercomplexity along with sample indicators of student performance. Classroom activities are accom-panied by an outline of program content. In addition, the level that most students can be expected toattain is identified with an asterisk.
A bank of test items, now under development, provides the teacher with easy access to appropriatemeasures. Items are organized according to levels of difficulty.
Due to the rapidly changing nature of the subject, a separate personal finance resource list isavailable from the personal finance specialist at the Department of Education.
State Standards
Statewide goals for Oregon schools are presented in OAR 581-22-201:
(1) The Board, in response to the changing needs of Oregon learners, sets forth six goalsfor the public schools.
(2) Conceived and endorsed by Oregon citizens, the statewide goals are designed to assurethat every student in the elementary and secondary schools shall have the opportu-nity to learn to function effectively in six life roles: INDIVIDUAL, LEARNER,PRODUCER, CITIZEN, CONSUMER and FAMILY MEMBER. . . .
(3) The statewide goals shall be implemented through the district, program and coursegoals of each local school district. . . .
The State Board of Education's Standards for Oregon Schools contain certain requirements whichrelate directly to personal finance and economic education in Oregon. According to OAR 581-22-211:
Each school district shall maintain a coordinated K/1-12 instructional program based on:
(1) District goals adopted by the district school board and consistent with the goalsadopted by the State Board;
(2) Program goals consistent with goals adopted by the State Board;
1
(3) Competence requirements for graduation; and
(4) Course goals.
In addition, as partial fulfillment, of the state graduation requirements listed in OAR 581-22-316,students must earn one unit of credit in personal finance and economics. According to OAR 581 -22-102, a "unit of credit" is defined as "certification of a student's successful completion of classroom orequivalent work . . . in a course of at least 130 clock hours."
Goal-Based Planning
Goals give purpose and direction when planning activities and they provide a common language fordiscussing the merits of activities as they are carried out. As a reference for planning, districts usestate goals, district goals, program goals, course goals.
State goals describe what the Oregon Department of Education thinks a student ought to learn inpublic school. District goals describe what the local community and its schools think a student ought tolearn in school locally, and how such learning relates to state goals. Program goals describe what localcurriculum planners and teachers think a student ought to learn in personal finance and economiceducation and how such learning relates to district goals. Course goals describe what teachers think astudent ought to learn in personal finance and economics and how such learning relates to programgoals.
Competence Requirements
Competence is a separate but related part of goal-based planning. It is one of three graduationrequirements.* While districts plan and evaluate instruction by means of goals, minimum require-ments for graduation are based on credit, attendance and competence.
Competence means being capable, and students indicate competence by demonstrating their knowl-edge and skills. Districts verify student competence through the local list of indicators of competence(what many people have called "competencies").** Districts generally have developed indicators ofcompetence for the "consumer" in four areasreading, writing, mathematics and reasoning. Howev-er, the curriculum may be developed for all six by adding listening and speaking to the requiredcompetence areas.
*OAR 581-22-316**See Competence Guide list, Standards Guidelines: Competence Requirements (Salem: Oregon Department of Education.
1980), page 2.
2
For example, in personal finance:
INDIVIDUAL
STATE GOALS FOR OREGON LEARNERS
LEARNER PRODUCER CITIZEN CONSUMER
DISTRICT GOAL
Stude. its will know how the use ofpersonal resources affects and is af-fected by our economic system.
PROGRAM GOAL
Students will be able to make finan-cial decisions which contribute to fi-nancial stability and personal satis-faction.
COURSE GOALSSECONDARY
9-12
The student will be able to judge theimpact of financial planning onmoney management and economicsecurity.
FAMILYMEMBER
COMPETENCE REQUIREMENTS ANDRELATED INDICATORS
A Readeg, Following a reading assignment, distin-guish between fixed and flexible expenses.
B Writeeg, Describe ways financial planning helpsto budget resources.
C Matheg, Prepare budgets for different incomelevels, using percentages for variousexpenditures.
D Speakeg, In a presentation to the class, point outways in which financial planning helpsindividuals and families in specific situa-tions.
E Listeneg, Following a classroom presentation, liststeps in planning a budget.
F Reasoneg, Justify the need for financial planningin specific situations.
It is important that teachers providing personal finance and economics instruction be directlyinvolved in developing district, program and course goals so that their curriculum is coordinated withother subject areas.
When developing program and course goals, it should be pointed out that personal finance and
*These are sample performance indicators taken from 2.2 Financial Planning, page 26. Districts may adapt any of theperformance indicators as indicators of competence.
3
economic education have several interrelated areas of study, yet each has its own subject matter focus.The concepts and goals listed below show the scope of the personal finance curriculum presented inthis guide.
CONCEPT AREAS
Employment and Income
Money Management
Credit"
Purchase of Goods and Services
Rights and Responsibilities in theMarketplace
PERSONAL FINANCE
PROGRAM GOALS
Students will be able to function responsibly in theinterrelated roles of wage earner and consumer inthe marketplace.
Students will be able to make financial decisionswhich contribute to financial stability and personalsatisfaction.
Students will be able to plan for using credit interms of present and future needs and income.
Students will be able to make wise decisions aboututilizing resources when purchasing goods and ser-vices.
Students will understand common economic prob-lems and be able to function as responsible consum-ers in the marketplace.
104
The following table illustrates how personal finance reinforces various concepts in economics.
Personal Finance Curriculum Economic Concepts
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EMPLOYMENT AND INCOMEObtaining a Job 0 0Meeting Responsibilities for Job Success 0 0 XEmployment Organizations 0 0Employment LawsFederal and State 0 0
MONEY MANAGEMENTFinancial Security and Employment 0 X X XFinancial Planning X X X XBanking Services and Financial Records 0 Xsavings 0 X XInvestments 0 X XInsurance 0 XLegal Documents 0Taxation X 0 X
CREDIT
Credit Problems0
XCredit Selection
0Consumer Credit Laws 0
XCredit Availability and Use 1 0
PURCHASE OF GOODS AND SERVICESFactors Affecting Consumer Purchases X X X 0 XThe Role of Advertising 0 XGuidelines for Shoppers x o o xMaking Specific Purchases 0 X X
RIGHTS AND RESPONSIBILITIES IN THE MARKETPLACETheU S Economic System 0 X X 0 XRights and Responsibilities of the Consumers/Sellers X X X XFraudulent and Deceptive Practices 0Sources of Consumer Assistance 0 X 0Consumer Legislation X 0 0
0 - Indicates minor emphasis.X - Indicates major emphasis.
implementation
According to State Board of Education commentary on OAR 581-22-316: "Personal Finance andEconomics - Each student will study materials in both content areas . . . districts may develop variousofferings designed to meet the needs of students, but in all cases the content must be directlyidentified with personal finance and economics." This commentary was dev loped to further clarifyrule language as well as the Board's intent when adopting the rule.
While the personal finance and economics requirement calls for study in both content areas, it does notdefine the amount or proportion of time for either. There are a number of ways to meet the creditrequirement. Personal finance could be integrated in varying degrees with economic education; eitherpersonal finance or economic education could be the major focus. Personal finance and economicscould be taught as a single course or a series of courses, or through separate courses.* Even whentaught as part of other instructional programs, such as business education, home economics,mathematics, and social studies, program goals and course goals must be developed for personalfinance and economics.
RECOMMENDED STEPS IN ESTABLISHING A PERSONAL FINANCE CURRICULUM
STEP 1 DETERMINE LOCAL DISTRICT NEEDS.
Review state standards and curriculum guidelines.
Establish community review process utilizing the serv:er.,- of:
advisory committees,curriculum committees,student, parent, teacher groups.
Analyze economic data, trends and needs in the local area.
Research resources available in the community.
Compile information about local needs as a basis for program development.
STEP 2 SECURE ADMINISTRATIVE AND SCHOOL BOARD SUPPORT.
Coordinate district goals for personal finance with program development at the schoollevel.
Determine course of study in light of total curriculum offerings:
*With the first approach, no specific subject endorsement for certification is required; with the latter, the economics teachermust hold a social studies endorsement.
7 2
program goals*,staff assignment and training,budgetary support,assessment and evaluation.
Assign administrative liaison to local school(s.
STEP 3 ASSIGN LOCAL SCHOOL COORDINATOR.
Designate a person responsible for coordination and establish responsibilities.
STEP 4 ANALYZE CURRENT OFFERINGS.
Review required and elective offerings with similar curriculum content.
Determine which offerings have a direct correlction in terms of content, such as CareerDevelopment.
Establish general guidelines for implementation model based on current offerings,staffing, facility availability, and district-level decisions.
STEP 5 IDENTIFY TEACHING STAFF.
Select staff who are interested in teaching personal finance and economics.
Utilize staff with certification endorsements in business education, home economics,mathematics or social studies, when possible.
STEP 6 DEVELOP CURRICULUM DESIGN.
Write plenned course statements, including course goals which are based on programgoals.
Establish implementation model, including the grade levellt at which it will be offered.
Determine performance requirements. activities and resources for the program.
Review the basic design to assure that individual student needs, interests and abilities areconsidered.
Develop options for students with special needs, including identifying materials andresources for independent study or research, and for bilingual students.
STEP 7 PROVIDE STAFF INSERVICE AND PROFESSIONAL GROWTH OPPORTUNITIES.
Establish a separate budget, including funds for professional growth opportunities, ifpossible.
Identify individual staff needs and interests through staff inservice.
Determine what inservice opportunities are already available.
Provide staff inservice and coordination opportunities,
Establish a procedure for training new stuff on an annual basis.
STEP 8 DEVELOP EVALUATION PROCEDURES.
Determine means for assessing individual student progress.
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Establish evaluation procedures for instruction, including analysis of curriculum develop-ment by staff on an annual basis.
STEP 9 IMPLEMENT INSTRUCTIONAL OFFERINGS.
Establish timeline for implementation or revision.
Coordinate implementation plans with the revie.% Lind acquisition of resources.
STEP 10 ESTABLISH RE-EVALUATION AND REVISION PROCEDURES.
Determine timeline and cycle for review and evalL
Coordinate re-evaluation and revision of design with other associated curriculum areasand in light of staff work load assignments.
Review instructional materials on a regularly-scheduled basis.
9 14
assessment
Assessment is essential to sound instructional planning. Once instructional plans are implemented,the teacher needs to determine whether students are attaining desired outcomes, and whetherinstruction in personal finance is helping them to reach those outcomes.
Assessment activities involve both group and individual approaches. Measurement of group perform-ance helps determine the course of study; measurement of individual student performance helpsteachers plan teaching strategies. The interrelationship is shown below.
ASSESSMENT OF GROUP AND INDIVIDUAL PERFORMANCE
ASSESSMENTS of
GROUPPERFORMANCESrelated to . . .
district goalsprogram goalscourse goals
-ow
INDIVIDUALPERFORMANCES
related to . . .
course goalspersonal goalsgraduation requirements(le, competence requiredfor graduation)
To identifygroup
progressneeds
.....1111.,
s
To identifyindividual
progressneedsinterests
to improve programsby . . .
adjusting plans, goals,courses, major activities
tto improve instructionby . . .
--40- adopting strategies, prac-tices, performance re-quirements
11 15
Under Goal-Based Planning, page 2 of this guide, goals were described as learning outcomes.Assessment should determine:
The extent to which students are attaining the outcomes the community and its schools havedesignated (district goal).
The extent to which students are attaining the outcomes teachers and curriculum planners havedesignated for the curriculum (program goal).
The extent to which students are attaining the outcomes teachers have designated for a course,such as Personal Finance I (course goal).
Furthermore, assessment of personal goals helps determine the extent to which the student isattaining those outcomes designated as of greatest personal importance, need, or interest. Identifica-tion of learning strengths and weaknesses in a student's performance helps determine factors whichenhance or inhibit attainment of desired outcomes.
Before assessment activities are conducted, clear goals and indicators describing student performancewhich can be accepted are necessary. Such statements guide assessment activities toward producinginformation that is useful in making curriculum decisions.
12
4
emp oymentand income
1.1 Obtaining a Job1.2 Meeting Responsibilities for Job Stvvess
1.3 Employee Organizations1.4 Employment Laws - Federal and State
employment and income
FIRST LEVEL
1.1 Obtaining a Job
STUDENTS WILL KNOW FACTORS WHICH IN-FLUENCE OPPORTUNITI}..2. FOR EMPLOYMENTAND INCOME.
List several factors which affect employmentopportunities and the potential for earning income.
List sources of information about job oppor-tunities and job requirements.
Describe grooming practices and dress stan-dards appropriate for a number of types of jobinterviews.
STUDENTS WILL COMPREHEND HOW VARIOUSFACTORS INFLUENCE OPPORTUNITIES FOREMPLOYMENT AND INCOME.
Explain factors affecting employability and in-come opportunities.Give examples of sources of information forspecific jobs.
Have students brainstorm factors affecting employ-ment opportunities; identify community resourcepeople for students to interview regarding the im-portance of such factors. Next, invite resource peopleto class to discuss job opportunities and the servicesprovided by such organizations as the state employ-ment office, private employment agencies, youthopportunity centers. As a class, discuss other waysjobs can be found.
Divide the class into groups for the purpose of estab-lishing mock employment agencies. Have each groupselect three or more occupations and compile infor-mation on: potential earning power, the skills and
training required, anticipated working conditions,and where jobs can be found. Next, ask each studentto research and list aptitudes, skills and personaltraits necessary for a specific job of a personal choice.
As a follow-up, invite a panel of local business peopleto class to discuss application forms, resumes andletters of application, on-the-job dress requirements,interview and testing procedures.
SECOND LEVEL
*STUDENTS WILL BE ABLE TO APPLY VARIOUSJOB SEARCH TECHNIQUES AND APPLICATIONTECHNIQUES TO SPECIFIC SITUATIONS.
Use local sources to determine employment po-tential in specific situations.
Write a letter of application.
Complete an application form.
Predict outcomes of several job interviews.
STUDENTS WILL BE ABLE TO ANALYZE THEIROWN POTENTIAL FOR EMPLOYMENT.
Relate how interests, abilities, training and ex-perience influence employability in specificsituations.
Select several careers which reflect personalinterests and abilities.
Have students review local newspaper "help wanted"listings and talk with people in the community aboutthe potential for employment locally; then ask eachstudent to prepare a list of potential jobs and investi-gate the skills and training required for those ofinterest personally.Ask each student to prepare a list of five questions
14 1 8
which a potential employer might ask a job applicantand then determine how best to provide such infor-mation through letters of application, resumes, inter-views, or recommendations.
Using a transparency, demonstrate for students howto complete an application form correctly. Have stu-dents complete application forms; comment or makeneeded corrections on an individual basis.
Discuss the elements of a good letter of application.Distribute copies of a sample letter and discuss as aclass. Have students write their own letters of appli-cation.
Show students a film about interviews and then havethem simulate various interview situations. Follow-ing each, discuss whether the applicant is likely toreceive the job. Point out both positive and negativeaspects of each interview. Have students repeat inter-views, including as many improvements as possible.
Using a Needle -Sort of the Career Information Sys-tem (CIS), have students identify and list individualinterests and skills and job categories related to suchinterests and skills. From the list, have studentsselect several careers to explore in more detail.
THIRD LEVEL
STUDENTS WILL BE ABLE TO PROPOSE WAYSTO MEET CAREER GOALS.
Design a plan for meeting career goals.
Summarize the importance of factors which af-
feet the selection of careers in specific situa-tions.
STUDENTS WILL BE ABLE TO JUDGE THE ADE-QUACY OF JOBS IN TERMS OF FULFILLINGLONG-TERM CAREER GOALS.
Compare the potential of several occupations forreaching personal career goals.
Interpret the effect of training and experienceon long-term career goals.
Have each student select a successful person in his-tory with a job of interest to the student and write areport based on the following questions:
What career goals might this person have had?
How would such goals relate to your career goalstoday?
How did this person achieve those goals?
What factors could have influenced this person'schoice of careers and how did these factors helpthis person's achievement?
As a wrap-up, ask each student to outline and de-scribe how one can achieve individual career goals,based on research and the answers to the questionsabove.
Using earlier research on careers, ask students todecide which jobs meet their criteria. Investigatetraining opportunities and determine whether suchtraining would help attain long-term career goals.
Factors affecting employment op-portunities and income potentialPersonal characteristics
Mental and physical healthGrooming and personal cleanlinessAppropriate dress standards
Salable skills, talents, and experiencesSchool courses, grades, and atten-
danceHobbiesSkillsSummer and part-time job experi-
encesSports and extracurricular activities
Information on jobsOccupational Outlook HandbookCurrent articles about occupational
trendsOccupational Outlook QuarterlyPrivate and public agencies
State employment officesPrivate employment agenciesYouth employment servicesYouth corp agenciesCivil service agenciesApprenticeship board
Career Information System (CIS)Other
Newspaper want adsSchool counselorsCommunity businessesYellow pages of telephone bookFriends and relativesProfessional publications
Job requirementsDictionary of Occupational riflesOccupational Outlook HandbookCareer cluster guidesInterviews with employers and employeesCareer Information System (CIS)
Personal interviewPunctualityCourtesyGood grammarPerseveranceSelf-confidenceEnthusiasmProper attitudePoiseKnowledge of employer and the businessAppropriate dress and grooming
15
Alert, intelligent responsesOther
Credit recordRecord of civil actionsReferences
Procedures in applying for a jobPrepare personal data sheet (resume)Write letters of applicationObtain recommendationsObtain referencesFill out application formsTake testsObtain social security number and work
permit (1.4)
Factors influencing career selectionInterestsSkills and abilitiesPresent and future goalsJob requirementsEmployment oppor.unitiesJob locationJob securityPresent and potential IncomeRisk or adventureBenefitsWorking hours and conditions
1.2 Meeting Responsibilities for Job Success
FIRST LEVEL
STUDENTS WILL KNOW WHY MEETING EM-PLOYER AND EMPLOYEE RESPONSIBILITIESCAN LEAD TO SUCCESS ON THE JOB.
Identify responsibilities of employers to em-ployees.
Identify responsibilities of employees to employ-ers and to other employees.
*STUDENTS WILL COMPREHEND HOW EMPLOY-ERS AND EMPLOYEES MEET ON-THE-JOB RE-SPONSIBILITIES SUCCESSFULLY.
Explain how employer and employee attitudesinfluence success on the job.
Give examples of reasons for employee promo-tions.
Explain most frequent causes of employee ter-mination.
Write, visit, or invite persons from managementlevels of large companies to: discuss training andeducation programs for their employees; describecriteria used for employee evaluation (performanceratings); identify the most frequent causes of em-p1 iyee termination; discuss the basis for employeerromotions. As a follow-up, discuss performance rat-ing scales fur employees who are on probation prior totenured employment or who are being rated for sal-ary increases. Discuss various criteria used as a basisfor promotion (ie, merit, seniority, automatic).
Have students read several newspaper "help wanted"ads and determine to what extent, if any, the respon-sibilities of the employee or the employer are de-scribed. Next, ask each student to select one ad andlist the information provided including employer andemployee responsibilities and job advancement infor-mation which would be useful to know before accept-ing that particular job.
As a class, prepare a list of on-the-job "Do's" and"Don'ts" and discuss how these factors affect jobsuccess and advancement.
SECOND LEVEL
STUDENTS WILL BE ABLE TO APPLY TECH-NIQUES FOR MEETING JOB RESPONSIBILITIES
ACCORDING TO THE SPECIFIC SITUATION.
Modify a situation to improve potential for jobsuccess and advancement.
Relate attitudes to job success.
STUDENTS WILL BE ABLE TO ANALYZE INDI-VIDUAL RESPONSIBILITIES OF EMPLOYERSAND EMPLOYEES.
Discriminate between responsibilities of em-ployee and employer in a specific situation.
Outline ways employees have maintained goodworking relationships in given situations.
Divide the class into groups to investigate casestudies involving comments by employees and em-ployers, or among other employees. Develop a skitillustrating one of these situations, and have theclass suggest changes which might improve workingrelationships. Emphasize the importance of attitudeson the job.
Ask groups of students to review various hypotheticaljob situations which are unsatisfactory, and listexamples of employer and employee responsibilitieswhich are not being met. In addition, have them listother responsibilities which they feel should be ob-served, as well as how employees can maintain goodrelationships with other employees.
THIRD LEVEL
STUDENTS WILL BE ABLE TO RELATE HOWVARIOUS FACTORS CONTRIBUTE TO JOB SUC-CESS AND ADVANCEMENT.
Design a plan for upgrading skills for a specificoccupation.
Summarize experience or training needed foremployability or job advancement in varioussituations.
STUDENTS WILL BE ABLE TO JUDGE THEAPPROPRIATENESS OF EMPLOYER OR EM-PLOYEE ACTIONS.
Justify the use of specific criteria as the basisfor promotion.
Appraise how employee attitude influences jobsuccess in specific situations.
16 20
Ask each student to select a job that is affected byrapidly changing technology and research the typesof knowledge and skills needed by talking to individ-uals employed in the occupation. Have the studentalso determine approaches for upgrading skills anddevelop a plan for accomplishing such training. Theplan should list the training provided by varicusinstitutions, including courses, times and locations,as well as other types of experience which would be
helpful for entry level employment or advancementin that field.Review hypothetical situations involving the promo-tion of one employee over another. As a class, deter-mine reasons why an employee was promoted basedon a prepared list of criteria; include a discussion ofemployee attitude.
Responsibilities of employeeTo employer
Competent workThrifty use of materialsPunctualityHonestyWillingness to follow ordersPleasant attitudeLoyaltyRespectAcceptance of criticismDependabilityInitiativeInterestSelf evaluation
To other employeesTeamworkThoughtfulnessLoyaltyHonestyCooperationPleasant attitude
Responsibilities of employerAdequate supervisionFair personnel policiesSafe working conditionsOpen channels of communicationRecognition of achievementRecognition of civil rights and employeeprotection laws (1.4)
Techniques for job advancementPromotions within organizationsPromotions outside organizations(recruitment)Basis for promotions (performance ratingscales)Methods of pay increaseAdditional education/training
17
1.3 Employee Organizations
FIRST LEVEL
STUDENTS WILL KNOW HOW GROUPS OFEMPLOYEES CAN ORGANIZE TO INFLUENCEEMPLOYMENT CONDITIONS.
List the major purposes of labor unions.
List the major purposes of professional organi-zations.
*STUDENTS WILL COMPREHEND THE IMPACTOF EMPLOYEE ORGANIZATIONS AND UNIONSON THE EMPLOYEE.
Explain the purposes and expectations of aunion shop.
Give examples of services and benefits providedby professional organizations.
Invite union officials to class to discuss the purposesand expectations of a typical union shop; invite mem-bers of professional organizations to discuss servicesand benefits of professional organizations. After thepresentations, encourage questions and answersabout the functions of these organizations. As afollow-up, have students read about the developmentof union shops in the United States and discuss theoriginal purposes for which each was established.Have students interview union members to askwhether union shops have the same purposes today.
SECOND LEVEL
STUDENTS WILL BE ABLE TO APPLY KNOWL-EDGE OF UNIONS AND PROFESSIONAL OR-GANIZATIONS TO VARIOUS EMPLOYMENTSITUATIONS.
Show how membership in a union or profession-al organization influences employability or jobadvancement.
Relate the advantages and disadvantages of aunion shop to a nonunion shop.
STUDENTS WILL BE ABLE TO ANALYZE THEIMPACT OF UNION OR PROFESSIONAL MEM-BERSHIP ON EMPLOYMENT.
Point out the effect of the union movement onemployee conditions in specific situations.
Point out how professional organizations haveinfluenced professional standards.
Divide the class into groups, with each group repre-senting a specific occupation. Ask those groups whoseoccupations are represented by unions to investigatethe development of the union movement generallyand of the specific union that represents the occupa-tion, the pros and cons of unions and the specificunion, the wage scales and fringe benefits of unionand nonunion occupations, jobs available to teen-agers which involve unions and a comparison ofmonthly dues among such unions.
Have groups whose occupations are represented byprofessional organizations investigate the advan-tages and disadvantages of such organizations, thenumber and types of professional organizations avail-able in the community, and membership require-ments according to occupation. As a class, determinethose characteristics which unions and professionalorganizations hold in common as well as those whichare unique to each.
THIRD LEVEL
STUDENTS WILL BE ABLE TO RELATE KNOWL-EDGE OF UNIONS AND PROFESSIONAL OR-GANIZATIONS TO PERSONAL CAREER DECI-SIONS.
Explain how union membership and nonmem-bership could affect employees in specific occu-pations.
Summarize the economic and noneconomic ef-fects of union and professional organizationmembership in specific situations.
STUDENTS WILL BE ABLE TO JUDGE PERSON-ALLY THE VALUE OF UNION AND PROFES-SIONAL ORGANIZATION MEMBERSHIP.
Appraise reasons for membership and nonmem-bership in specific situations.
Support a personal decision regarding union orprofessional organization membership.
Utilizing previous research on general characteristicsof unions and professional organizations, have eachstudent select a specific union or organization forresearch. Through investigation, including reading
18 1)2
and interviews, determine the specific economic andnoneconomic benefits, membership benefits, and whymembership, if optional, is of benefit to the individ-ual employee.Have students research employee conditions prior tothe union movement and the growth of professionalorganizations. Speculate what employee conditions,including salaries and benefits, would be like at the
present time without the involvement of unions andorganizations. Ask groups of students to select issuesrelated to working conditions and trace the role ofunions and professional organizations historically inbringing about improved working conditions. Includea chronological sequence of events leading to workingconditions as they exist currently.
UnionsPurposes
Act as collective bargaining agents foremployees
Wages for regular work andovertime
Hours of workRequirements for employmentPensionsHealth, safety, and working
conditionsMethod of hiring and firingCases involving dischargeMethods of settling disputes
Provide job placement servicesEnforce labor agreementsSupport legislation affecting worker
Professional organizationsPurposes
Establish and maintain professionalstandards
Support legislation affecting theprofession
Encourage individual growth andadvancement
Improve working conditions andincome
Provide pension, retirement, andsupportive benefits
Keep membership up to date onresearch and technology
Negotiate with employer on terms ofemployment (restricted)
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1.4 Employment Laws - Federal and State
FIRST LEVEL
STUDENTS WILL KNOW WHICH FEDERAL ANDSTATE LAWS AND REGULATIONS PROTECTEMPLOYERS AND EMPLOYEES.
List major employment laws and regulations.
Matcl: ws with agencies responsible for ad-minis each.
Describe employment laws or regulations whichaffect minors and their employers.
*STUDENTS WILL COMPREHEND THE EFFECTSOF EMPLOYMENT LAWS AND REGULATIONSON EMPLOYERS AND EMPLOYEES.
Explain how employment laws protect the em-ployee.
Give examples of laws or regulations which af-fect minors or their employers.
Explain why laws differ, depending on the occu-pation.
Have students answer the following questions:
Why are there laws for protecting employees?
Why are laws different for certain jobs?
Why do laws for employees who are minorsdiffer from laws for employees who are adults?
Why do laws for 14- and 15-year-old employeesdiffer from laws for 16- and 17-year-olds?
Invite representatives from the local Wage and HourDivision to class to discuss: how to obtain a workpermit, when a work permit is required, what types ofjobs are not regulated, what jobs are permissible foremployees of different ages, the work hours for em-ployees of different ages, and the jobs which employ-ees under 18 years of age are prohibited from holding.
Develop a list on the board of major federal and statelaws and regulations affecting employment. Havestudents use the telephone book and interview agen-cy or business representatives to determine whichagencies administer each law or regulation.
Invite an employer to class to discuss the laws andregulations under which employers must work andthe agency that is responsible for administering each.
SECOND LEVEL
STUDENTS WILL BE ABLE TO APPLY EMPLOY-MENT LAWS AND REGULATIONS TO SPECIFICSITUATIONS.
Show how laws differ according to age group orjob.
Relate current laws affecting minors to specificjob situations.
Write to an agency regarding a potential viola-tion of an employment law or regulation.
STUDENTS WILL BE ABLE TO ANALYZE HOWLEGISLATION HAS AFFECTED SPECIFIC EM-PLOYMENT CONDITIONS.
Illustrate how employment legislation related tominors differs from legislation for adults.
Identify how employment conditions havechanged as a result of federal and state legisla-tion.
Have students review current federal and state agen-cy publications dealing with the administration ofvarious laws or regulations, such as the "Employ-ment of Minors" pamphlet from the Oregon Bureauof Labor and Industries. Determine the status ofcurrent laws and regulations which affect employeeswho are minors. As a class, discuss differences amonglaws and regulations for various workers according toage and sex.
Have students investigate specific laws or regula-tions which affect employees who are minors in occu-pations in which they are interested. Determinewhether or not these laws or restrictions are based onhealth and safety concerns of young employees. Readabout the working conditions of young employees inthe early 1900's and discuss whether these conditionshave been affected by legislation.
Using a variety of occupations as examples, have
20 24
students identify special regulations or restrictionsfor employees who are minors which are not imposed/on other workers. Determine whether other claisifi=cations of workers, such as women, have special pro-tection through legislation. As a class, disciiss theadvantages and disadvantages of special legislation.
Invite an employer to class to explain how laws andregulations affect the employment of minors in cer-tain occupations. Discuss whether these laws benefityoung employees wishing to enter a specific occupa-tion.
Using a case situation, write hypothetical letters toagencies identifying potential violations of employ-ment laws or regulations and document complaintswith specific data and evidence. Read letters lin classand determine what action might be taken by agen-cies and whether employers would be involved. Dis-cuss the advantages of resolving problems with anemployer prior to filing a complaint.
THIRD LEVEL
STUDENTS WILL BE ABLE TO RELATE THEECONOMIC AND NONECONOMIC EFFECTS OFEMPLOYMENT LAWS AND REGULATIONS ONEMPLOYERS AND EMPLOYEES.
Summarize the potential consequences of re-scinding all employment legislation.Explain economic implications of protectivelegislation for employees and employers.
STUDENTS WILL BE ABLE TO JUDGE THE ADE-QUACY OF EMPLOYMENT LAWS AND REGULA-TIONS IN PROTECTING EMPLOYERS AND EM-PLOYEES.
Justify special protection employees receive ac-cording to age, sex or occupation.
Appraise the development of legislation protect-ing the employee in the United States.
Divide the class into research groups and have eachgroup choose one major federal law designed to pro-tect employees and study the background issueswhich led to the enactment of this law. Identify andclassify the major provisions of the law according to:benefits, including health and safety, economic se-curity, or employment security. Either support thelegislation as meeting employee needs today based onreview of provisions or rewrite the legislation so thatit meets current employee needs. As a follow-up, haveeach group develop a discussion paper on the poten-tial impact of rescinding all employment legislation.Include opinions as to what might happen withspecific occupations such as educators or mine work-ers, as well as an overview of the total effect onemployment in the United States.
Inv:te to class a panel of employees representinggroups who receive special protection through legisla-tion to discuss the reasons for such legislation. Havestudents ask questions about how the laws affectsuch "special" groups and other employees.
For students interested in self-employment occupa-tions, have them research the licensing and regula-tions required. Based on this study, ask students tochoose whether they wish to be self-employed anddefend their position by showing that they have in-vestigated the field.
Laws affecting workersMajor federal laws protecting workers/administering agencies
National Labor Relations Act (WagnerAct) U S Department of Labor
Fair Labor Standards Act of 1938(amended 1966. 1972 and 1974)Wage and Hour and PublicContracts DivisionsU SDepartment of Labor
Taft-Hartley Act U S Department ofLabor
Social Security Act U S Departmentof Health and Human Services
Williams-Steiger Occupational Safetyand Health Act of 1970 (OSHA)Department of Labor
Major state laws protecting workers/administering agencies
Oregon Safe Employment ActWorkers' Compensation Board,Accident Prevention Division
Workers' Compensation LawWorkers' Compensation Board
Employment Division LawOregonEmployment Division, OregonDepartment of Human Resources
Child Labor Standards ActWage andHouse Divisidh, Bureau of Laborand Industries
Major laws or regulations affectingemployment of minors*Covers such items asMinimum wages and hours of workWork permits and Social Security
numbersMinimum age limits
Jobs which 14- and 15-year-old
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workers can doJobs which 16- and 17-year-old
workers can doInsurance requirementsSafety and health requirementsProhibited hazardous occupationsTraining agreements and plansLegal deductions from paychecks
*Both federal and state regulations maycover many of the same items; in suchcases, the more restrictive law orregulation will prevail.
moneymanagement.1.,..
2.1 Financial Security and Employment
2.2 Financial Planning2.3 Banking Services and Financial Records
2.4 Savings
2.5 Investments
2.6 Insurance
2.7 Legal Documents
2.8 Taxation
11/I
money management2.1 Financial Security and Employment
FIRST LEVEL
STUDENTS WILL KNOW THE TYPES OF FINAN-CIAL BENEFITS AND PROTECTION MADEAVAILABLE THROUGH EMPLOYMENT.
List various types of payroll deductions andemployment benefits.
Name types of income loss which can be protect-ed by employment benefits.
STUDENTS WILL COMPREHEND THE WAYSEMPLOYMENT CAN PROVIDE FINANCIALSECURITY.
Give examples of types of payroll deductionsand employment benefits.
Summarize the effects of employment on finan-cial security.
Review sample paycheck stubs for gross pay, take-home pay, involuntary deductions, voluntary deduc-tions (numerous options). Next, discuss the types ofprotection provided through employment to protectthe employee financially.
Use the Internal Revenue Service wage deductionchart to explain withholding taxes. (2.8) Invite asocial security representative to class to discuss: coststo the employee, benefits to minor dependents, ob-taining a social security number, how to check per-sonal accounts.
As a follow-up, have students talk to family andfriends about "fringe benefits" provided by em-ployers.
Have the class discuss financial problems and protec-tion available to the employee through employment
and individual responsibilities for financial security.
SECOND LEVEL
*STUDENTS WILL BE ABLE TO PLAN FOR FI-NANCIAL SECURITY IN LIGHT OF BENEFITSPROVIDED THROUGH EMPLOYMENT.
Compute payroll deductions for specific situa-tions.
Modify a budget to allow for protection fromfinancial problems in specific situations.
Show how financial protection varies accordingto employment benefits.
STUDENTS WILL BE ABLE TO ANALYZE FINAN-CIAL SECURITY IN SPECIFIC EMPLOYMENTSITUATIONS.
Illustrate how various employment benefits pro-vide financial security.
Point out financial protection available to anemployee.
Using various case studies involving loss of incomedue to death, illness, disability or unemployment,have students investigate the types of protection pro-vided through employment. Discuss the potential fi-nancial effects when the individual or family does notprovide for additional protection.
Using various employment and income situations,have students plan individual and family budgetswhich provide for: loss of income for three months, achange in take-home pay, an inflation rate of 10percent with no salary increase.
Review changes in employee social security contribu-tions for the past two years and discuss the effect on
personal spendable income.
THIRD LEVEL
STUDENTS WILL BE ABLE TO PROPOSE WAYSTO PROVIDE FOR FINANCIAL SECURITYTHROUGH EMPLOYMENT BENEFITS AND PAY-ROLL DEDUCTIONS.
Design a program to provide protection againstloss of income in specific situations.
Reconstruct a budget to provide for an increasein savings through payroll deductions.
STUDENTS WILL BE ABLE TO JUDGE THE ADE-QUACY OF EMPLOYEE BENEFITS AND INCOMEPROTECTION.
Compare income protection to essential and de-sirable needs in specific situations.
Appraise the degree to which employee benefitsmeet personal financial goals.
Have students establish hypothetical family situa-tions with specific financial goals. After researchingtypes of employment and private income protectionavailable, ask each group to prepare a financial pro-tection plan that appears to best meet the situation,present findings to the class and defend the plan.
Have a panel of students debate the pros and cons ofthe social security system as a form of employeeprotection.
Types of payroll deductions andemployee benefitsDeductions
Income taxesSocial security taxesInsurance premiumsUnion duesCharity contributionsCredit unionSavings programRetirementState Accident Industrial
Fund or private carrierBenefits
Salary (gross, net)Profit sharingPaid vacationDiscountsSick payI ave of absenceHolidays
Overtime payPer diem and travel reimbursementSeverance payInsurance plansSalary incentivesRetirement programsWorkers' Compensation or private
insurance
Implications for financialprotectionProtecting income loss fromillness
Group health insuranceEmployee savings plansPaid sick leave
UnemploymentWage guaranteesSeverance payEmployee savings plans
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Supplementary unemploymentbenefit 3
RetirementPensionSeverance payDeferred compensationEmployee savings plans
Death of employeeGroup life insuranceGroup accidental death and dis-
memberment insuranceSurvivors pensionDeferred profit sharingEmployee savings plans
DisabilityGroup loss of income insuranceDeferred compensationPaid sick leave or disability payPensionSeverance payEmployee savings plans
2.2 Financial Planning
FIRST LEVEL
STUDENTS WILL KNOW BASIC PRINCIPLES OFFINANCIAL PLANNING.
Identify reasons for financial planning.
List steps in planning a budget.
Describe ways financial planning helps tobudget resources.
STUDENTS WILL COMPREHEND HOW FINAN-CIAL PLANNING CONTRIBUTES TO FINANCIALSECURITY.
Give examples of how financial planning helpsindividuals and families in specific situations.
Explain the steps involved in planning a budget.
Distinguish between fixed and flexible ex-penses.
Develop a list on the board of possible sources ofincome, including work, investments, insurance, andvarious retirement plans. Discuss financial planningand what it includes. As a follow-up, assign a commit-tee to study and report on different ways to organizeresources.
Invite a financial counselor from a bank, creditunion, social service agency, etc, to speak to the classabout the problems of individuals who fail to estab-lish plans for managing their money. Discuss familybudgeting problems, examples of inadequate moneymanagement (include several income levels) and pos-sible consequences of such major changes in the fam-ily as divorce. Have students tape interviews withpeople regarding their approaches to budgeting; in-clude a young married couple, middle-aged couplewith children, and a senior citizen. Outline the com-mon steps used in budget planning, noting fixed andflexible expenses.
Discuss how other economic units, such as local, stateand federal governments, plan budgets; compare withindividual and family budget planning.
SECOND LEVEL
*STUDENTS WILL BE ABLE TO APPLY BASICPRINCIPLES OF FINANCIAL PLANNING TOPERSONAL INCOME SITUATIONS.
Predict the effects of financial planning onspecific situations.
Prepare budgets for various income levels.
STUDENTS WILL BE ABLE TO ANALYZE HOWFINANCIAL PLANNING PROVIDES FORECONOMIC SECURITY.
Point out ways in which financial planninghelps individuals and families in various situa-tions.
Relate how financial planning provides foreconomic security generally.
After analyzing the steps involved in budgeting, havestudents determine the adjustments which might berequired in a family budget if the following situa-tions occurred: an offspring enters college; familyincome increases by one-third; the family buys asecond car; the family moves to the suburbs; an agedparent moves in with the family; utility or gasolinecosts double; father or mother is unemployed (2.1);father or mother dies or is disabled. Follow with adiscussion summarizing the benefits of plannedspending.
Have students develop and keep a budget for onemonth, based on their present incomes. As a fcllow-up, ask students to interview various financial plan-ning experts regarding the benefits of financial plan-ning to individuals and families, and how it providesfor financial stability. Compile the information into alist of the pros and cons of budgeting.
THIRD LEVEL
STUDENTS WILL BE ABLE TO FORMULATE AFINANCIAL PLAN TO MEET A VARIETY OFSITUATIONS.
Create a financial plan that provides for in-creased expenditures in selected situations.
Reorganize budgeting steps and procedures toaccommodate specific situations.
STUDENTS WILL BE ABLE TO JUDGE THE IM-PACT OF FINANCIAL PLANNING ON MONEYMANAGEMENT AND ECONOMIC SECURITY.
Justify the need for financial planning in givensituations.
26 29
Compare the effects of using a budget as op-posed to not using a budget in given situations.
Ask each student to write a story about how theythink some figure in history, such as GeorgeWashington or Benjamin Franklin, might havemanaged finances. Have students support theirstories based on reading about the individual's habitsand lifestyle, and the economic needs and wants ofthe period.With various hypothetical family situations, have
students estimate the effect of financial planning orlack of planning, including the effects on individualfamily members and the community.
Using case studies depicting a variety of incomelevels and indebtedness situations, have studentsprepare several budgets which reflect financial goalsand budgeting techniques. As a class select one as themost logical ar d appropriate, and have students writea paper to defend the choice, describing the benefitsor disadvantages this budget plan might have.
Reasons for financial planningHelps individuals and families
Evaluate the use of moneyGet maximum satisfaction from
incomePrevent wasteful and unplanned
spendingMaintain personal credit worthinessOrganize resources (human, material)Reduce frustration and money worriesUnderstand the ways in which money
is saved, spent and borrowedPrepare for emergency situationsGain financial security and
independenceProvide a hedge against inflationEvaluate tax consequences (2.8)
Steps in planning a budgetDetermine gross and net payDetermine goals, needs and wants (4.1)Estimate total income (fixed and variable)Analyze past expendituresList fixed expensesEstimate flexible expensesPlan for savings and emergenciesAllocate discretionary resourcesEvaluate financial plan regularlySeek assistance in financial planning, if
necessary
27
2.3 Banking Services and Financial Records
FIRST LEVEL
STUDENTS WILL KNOW TYPES OF BANKINGSERVICES AND RECORDKEEPING PLANSAVAILABLE WHICH FACILITATE FINANCIALPLANNING.
List various types of banking services and fi-nancial recordkeeping systems.
Identify guidelines for using banking servicesand financial records.
STUDENTS WILL COMPREHEND THE EFFECTSOF BANKING SERVICES AND RECORDKEEPINGON PERSONAL MONEY MANAGEMENT.
Explain how keeping financial records and us-ing banking services can aid in financial plan-ning.
Give examples of banking services and financialrecordkeeping systems.
As a class, construct a bulletin board display depict-ing various types of banking services. Ask students toread about electronic funds transfer systems andidentify the types available in the immediate area,including possible services such as bill checks, auto-matic payroll deductions, debit cards.*
Discuss business aspects of family living and list onthe board examples of valuable papers which familiesshould keep. Next to each example, list ideas aboutwhere each might be stored. Next, utilize transparen-cies to illustrate various types of household recordsystems; as a class, discuss the reasons for keepingsuch records.
SECOND LEVEL
*STUDENTS WILL BE ABLE TO APPLY BANK-ING SERVICES AND RECORDKEEPING TECH-NIQUES TO THEIR OWN FINANCIAL PLAN-NING.
Plan a personal recordkeeping system.Modify spendiag plans based on a review of
*A card which ultimately will be tied to retail outletsso that customer purchases can automatically be"debited" to the individual checking account.
financial records.
Write a check, balance a checkbook, and recon-cile a bank statement.
STUDENTS WILL BE ABLE TO ANALYZE THEEFFECTS OF BANKING SERVICES AND RE-CORDKEEPING ON FINANCIAL PLANNING.
Point out the importance of banking services topersonal money management.
Determine spending patterns based on a reviewof financial records.
Identify the types of banking services availableto meet various needs.
Have each student complete a project of personalchoice: net worth computation for a family in a givensituation, record of personal expenditures and incomefor two weeks as a basis for future planning, a class-room or home inventory, a home business center.
Ask students to utilize a current income tax bookletto determine allowable income tax deductions. As aclass, discuss deductions and develop a system forkeeping track of deductions during the year; discussalso what proof is necessary should tax returns beaudited.
Demonstrate for the class the correct way to write acheck. Use a transparency to illustrate how anamount on a check can be changed and what can bedone to prevent this. Then have students practicewriting checks, keeping records and reconciling ac-counts in simulated checkbooks. As a class, discussthe distinction between overdrawing a checking ac-count due to carelessness or error and overdrawingwith intent to defraud. Point out the effects of over-drafts on an individual's credit record.
THIRD LEVEL
STUDENTS WILL BE ABLE TO PREPAREGUIDELINES FOR THE USE OF BANKING SER-VICES AND FINANCIAL RECORDKEEPING.
Compile a list of banking services available
3128
currently and the advantages and disadvan-tages of each service in specific situations.
Design a plan for maintaining personal recordsfor specific situations and needs.
Revise personal budgcts based on a review offinancial records and expenditures.
STUDENTS WILL BE ABLE TO JUDGE THEADEQUACY OF BANKING SERVICES ANDRECORDKEEPING TECHNIQUES FOR SPECIFICSITUATIONS.
Compare the costs and convenience of bankingservices in specific situations.
Justify the use of one type of recordkeepingsystem over another in specific situations.
Invite a local banker to class to discuss current and
anticipated services available through electronictransfer systems in the community. Have each stu-dent write a paper describing the implications forfinancial planning and recordkeeping, as well as im-plications for personal privacy.
Have students investigate various types of bankingservices available in the local community, includingcosts, services and limitations of each. Using avariety of hypothetical situations, select the bankingservices which best meet individual needs and situa-tions and defend the selection.
Review several budgets and recordkeeping systemsand determine the potential strengths and weaknes-ses of each. Outline the possible financial goals for afamily that might use each budget method or record-keeping system. Determine whether som° situationsmight imply that families have not established finan-cial goals.
Types and importance of bankingservices and financial recordsBanking services
Checking accountsBank statementsSavings accountsSafety deposit boxes/safe keepingForeign exchangeLoansFinancial advice to familiesEstate planning and trustsCredit cards/debit cardsPayment servicesInvestment services (2.5)Electronic funds transfer
Financial recordsAccounts of earning and spendingFinancial statement (net worth)Household inventoryinvestment recordsTax record (2.8) (eg. medical and drug
records, home purchase andimprovement records)
ImportancehelpsProvide proof of paymentEvaluate spending patternsProvide information for income tax
recordsAnalyze financial situationProvide a basis for determining future
purchasesProvide a basis for developing and
maintaining a budgetProvide proof of loss in case of fire or
theft
Guidelines for using banking servicesand financial recordsBanking services
Checking accountsWrite checks properlyKeep accurate record of checksMaintain up-to-date recordsConsider balance requirementsReconcile account monthlyCompare types of checking
accounts and costsSavings accounts
Compare types of accounts andinterest rates
Understand method of interestpayment
Know time period requirements. ifany
Safety deposit boxesIdentify valuables which need safe
storageKeep a separate record of contents
in personal safety deposit boxUnderstand safety deposit book
agreementFinancial records
Utilize check recordsDetermine those items necessary
for income tax recordsDevelop systems for filingKeep file up to dateCheck accuracy of records
29
32
2.4 Savings
FIRST LEVEL
STUDENTS WILL KNOW TYPES OF LAVINGSPLANS AVAILABLE AND FACTORS WHICH AF-FECT DECISIONS ABOUT SAVINGS.
List factors involved in making decisions aboutsavings.
List types of savings.
Identify methods of savings available.
STUDENTS WILL BE ABLE TO MAKE SAVINGSDECISIONS.
Distinguish between short-term and long-termsavings goals.
Defend the method and type of savings planselected in specific situations.
Give examples of types of indirect savings whichmeet personal needs in specific situations.
Develop a list of short- and long-term goals for teen-agers, young adults, newly married couples, growingfamilies, and retired people. Determine how muchwould have to be saved per week to achieve one ormore of these goals. Next, conduct a clasen.,om discus-sion around such questions as: How do attitudes in-fluence the habit of saving? What factors influencethe amount an individual or family may save? Is itpossible for a very low-income family to save?
Have students read about different types of savingsand discuss the advantages and disadvantages ofeach. Then, ask students to identify direct and indi-rect methods of saving, and construct a bulletin boarddisplay depicting examples of each.
SECOND LEVEL
*STUDENTS WILL BE ABLE TO APPLY DECI-SIONS ABOUT SAVINGS TO FINANCIAL PLAN-NING.
Predict the factors which influence savings deci-sions in specific situations.
Prepare savings plans for different situations.
STUDENTS WILL BE ABLE TO EVALUATE THEADEQUACY OF SAVINGS DECISIONS.
Point out the impact of various savings deci-sions on financial stability.
Select a method and type of savings that meetsneeds in specific situations.
Using hypothetical case studies, have groups of stu-dents research the amount of money a family couldsave in a given length of time by limiting or recyclingscarce resources. As a follow-up, have students com-pute the dollar amount of indirect savings from rid-ing the bus to school for one semester as opposed todriving a car.
Compare the earnings from a $50 savings bond and a$50 savings account for one year. Refigure for vari-ous lengths of time and discuss the differencesbetween both types of savings. Then, invite guestspeakers to class to talk about the types of savingsinstitutions and savings plans available. Discuss:Why is safety put first and earnings second? What ismeant by liquidity? In what circumstances mightliquidity be important? How does purpose affect thechoice of a savings plan? Based on personal goals andneeds, have students choose the most appropriatetype and method of savings.
THIRD LEVEL
STUDENTS WILL BE ABLE TO INTEGRATE SAV-INGS DECISIONS INTO FINANCIAL PLANNING.
Explain how savings decisions meet spendingplans.
Desiga a savings plan that meets both im-mediate and long-term needs.
Reconstruct a personal budget to reflect savingsdecisions.
STUDENTS WILL BE ABLE TO JUDGE THEVALUE OF SAVINGS TOWARD MEETINGPRESENT AND FUTURE FINANCIAL NEEDS.
Appraise the effects of utilizing savings plans inspecific situations.
Justify the selection of one type and method ofsaving in terms of a specific situation.
Interpret the effects of several factors on sav-ings decisions in selected situations.
30 33
As a class, compile a fact sheet for the purpose ofcomparing or ranking different types of savings planson the basis of interest paid, services offered, anddegree of risk involved. Ask students to defend theselection of one savings plan over another based onpersonal goals and needs. Next, support the attrac-tiveness of various savings plans based on economicconditions and tax implications.
Using hyv)thetical case studies involving variousincome levels and financial goals, have studentsselect the most appropriate type and method of sav-ings for each. Describe how a specific savings ap-proach would affect each situation, and make budgetchanges to include such an approach.
Factors affecting savings decisionsNeeds and wantsGoals (short- and long-term)Amount of discretionary incomeAttitudes toward savingCompatibility with spending plansSafety of principalPurpose of savingsConvenience of method of savingNeed for liquidity or long-term investmentPotential for growth, as determined by:
Rate of interestMethod of compoundingMethod of determining balance on
which interest is paidLength of time investedType of savings
Economic conditionsTax implications (2.8)
Types and methods of savingsTypes
Passbook accountsCertificate of deposit (CD)Government bonds
MethodsDirect (through institutions)Mutual savings banksCommercial banksSavings and loan associationsCredit unionsU S Government (bonds, treasury
bonds)Indirect (through limiting use of
resources)RecyclingFinding alternatives, such as car
pooling
31
2.5 Investments
FIRST LEVEL
*STUDENTS WILL KNOW HOW VARIOUS FAC-TORS INFLUENCE INVESTMENT DECISIONS.
List several types of investments.
Identify factors involved in making investmentdecisions.
STUDENTS WILL COMPREHEND THE FACTORSINVOLVED IN MAKING INVESTMENT DECI-SIONS.
Give examples of fixed and variable incomeinvestments.
Give examples of factors affecting investmentdecisions.
Summarize the advantages and disadvantagesof various types of investments.
As a class, investigate and report on the differenttypes of investment plans and their features, includ-ing get-rich-quick schemes. (5.3) Next, have studentsidentify investments of which they are aware and listthese on the board. Following a reading assignment,add to the list, and then classify each listing as fixed,variable, or a combination of both.
Discuss reasons for investing, including nonmone-tary gain such as travel. Then assign students ingroups to research specific types of investments andreport the advantages and disadvantages of suchinvestments to the class. Follow up with a classdiscussion on various personal and economic consid-erations when making investment decisions.
SECOND LEVEL
STUDENTS WILL BE ABLE TO APPLY INVEST-MENT DECISIONS TO PRESENT AND FUTUREFINANCIAL PLANNING.
Compute the anticipated rate of return onspecific investments.
Prepare investIne lific situations.
Modify .5pendinf5decisions.
.,.ude investment
STUDENTS WILL BE ABLE TO ANALYZE THEEFFECTS OF INVESTMENT DECISIONS ON FU-
TURE FINANCIAL SECURITY.
Illustrate how investment plans affect financialstability.
Select an investment plan to meet specific situa-tions.
Point out potential problems of various invest-ment plans.
Using various types of investments, have studentsfigure how the amount and regularity of payment orpurchase affect the rate of return.
Invite a panel of investment consultants to explainthe products and services they represent. Discuss:potential risk and anticipated return from varioustype:; of investments, reasons for investing, limita-tions or restrictions on various types of investments.Based on personal goals, needs and economic condi-tions, have students choose the most appropriate typeof investment for their present and future situations.Review financial plans to verify that choices areappropriate.
THIRD LEVEL
STUDENTS WILL BE ABLE TO FORMULATE IN-VESTMENT PLANS WHICH MEET PRESENTAND FUTURE FINANCIAL NEEDS.
Devise an investment plan that utilizes bothfixed and variable income investments.
Modify an investment decision based on in-fluencing factors in specific situations.
STUDENTS WILL BE ABLE TO jr THE ADE-QUACY OF INVESTMENT DECISIONS FORPRESENT AND FUTURE FINANCIAL PLAN-NING.
Interpret the consequences of a number of in-vestment plans.
Compare a number of investment plans in termsof specific criteria.Justify the selection of either fixed or variableinvestments for given situations.
Have students review inflationary trends for the pastthree years and project the anticipated inflationaryrate for the next ten years. Based on projected fig-
32
ures, ask students to explore various types of invest-ments, including collectibles and commodities, andplan investment portfolios to meet this projection.
Review various investment returns in terms of tax
implications and varying income levels. Ask studentsto select the type of investment that ',..-7ovides thegreatest after-tax return for each situation and de-fine the selection in terms of the potential disadvan-tages of other types of investments.
Types of investmentsFixed income investments
Credit union sharesNotes and debenturesCertificates of deposit (CD)Corporate and municipal bonds.
Includes state bonds (tax free,taxable)
Endowment insuranceU S Savings Bonds (Series EE and H)Certain types of tax sheltered annu-
ities (TSA), Keogh plans, indivi-dual retirement annuities (IRA)
Variable income investmentsCommon stocksBusiness (single proprietorship,
partnership, corporation or''co-op**)
Real estate (rentals or mortgages)Commodities (eg, gold, silver, dia-
monds)
CollectiblesCertain types of tax sheltered annu-
ities (TSA), Keogh plans, individ-ual retirement annuities (IRA)
Money market instruments
Factors affecting investment decisionsNeeds and wantsGoals (short- and long-term)Amount of discretionary incomeAttitude toward investmentCompatibility with previously established
savings and insurance plansCriteria for choosing an investment
SafetyPriceAnticipated rate of return (growth,
income)Liquidity
Economic conditionsTax implications (2.8)
33
3 6
2.6 Insurance
FIRST LEVEL
STUDENTS WILL KNOW THE WAYS THAT IN-SURANCE PROVIDES FOR ECONOMIC PROTEC-TION.
Identify types of insurance protection needed.
List the steps in planning for insurance needs.
List types of insurance available.
Identify points to consider when planning insur-ance programs.
STUDENTS WILL COMPREHEND THE COMPO-NENTS INVOLVED IN A BALANCED INSUR-ANCE PROGRAM.
Distinguish which types of auto insurance arerequired by law and which are not.
Paraphrase the benefits available throughspecific types of health, accident and incomereplacement insurance plans.
Give examples of permanent and temporary lifeinsurance plans.
Explain the protection provided by a specifictype of home and auto insurance.
Have students compose a humorous skit illustratingall the different risks a person might run into in oneday. Which risks might one be insured against? Havethe class discuss the concept of insurance and decidethe type of insurance which might be best suited foreach risk. Discuss considerations in planning for in-surance needs and prepare a checklist on the board.
Have a student committee invite an insurance repre-sentative to class to discuss different types of lifeinsurance plans, as well as individual and familyneeds for life insurance. Discuss important points toremember when planning insurance programs.
As a class, discuss the current cost of hospitalizationafter examining a representative hospital statementfor a broken leg, birth of a child, etc. Identify thetypes of medical insurance provided by various groupplans and private carriers.
Discuss various types of auto insurance plans and thecoverage provided by each. Determine which are re-quil by Oregon statute and which are at the option
of the insured party. Invite an auto insurance agentto class to discuss auto insurance for teenagers. In-clude the importance of a good driving record andother factors which influence insurance rates.
Discuss various types of home and personal propertyinsurance and identify those which non-homeownersmight need.
SECOND LEVEL
STUDENTS WILL BE ABLE TO PLAN FOR IN-SURANCE NEEDS FOR SPECIFIC SITUATIONS.
Compute the costs and benefits of specific insur-ance plans.
Predict how personal factors affect insuranceneeds and costs.
*STUDENTS WILL BE ABLE TO ANALYZE HOWSPECIFIC TYPES OF INSURANCE MEET PER-SONAL INSURANCE NEEDS.
Select home and personal property insuranceaccording to specific circumstances.
Select life insurance according to specific cir-cumstances.
Select auto insurance according to legal require-ments and specific circumstances.
Outline the costs and benefits offered by severalhealth insurance programs made availablethrough employment.
Prepare a chart showing the major features of vari-ous forms of life, health, home and auto insuranceand discuss factors which influence rates. Then,utilizing hypothetical case studies depicting a varietyof individual and family situations, and economicconditions, plan for the least expensive coverage tomeet minimum needs for home, life, auto and healthinsurance.
Compute the cost of first dollar coverage, deductibleand major medical plans and determine which plan ismost appropriate and economical, considering protec-tion provided through employment. As a follow-up,have students debate the effects of various personalfactors on insurance costs, including health habits,lifestyle, driving record, etc.
34
THIRD LEVEL
STUDENTS WILL BE ABLE TO FORMULATE IN-SURANCE PLANS BASED ON PRESENT AND FU-TURE NEEDS.
Design insurance plans for individuals andfamilies in different situations.
Create several insurance plans to meet similarsituations.
Revise insurance plans to meet changing cir-cumstances.
STUDENTS WILL BE ABLE TO JUDGE THEAPPROPRIATENESS OF INSURANCE IN PRO-VIDING FOR FINANCIAL SECURITY.
Appraise various types of insurance in terms ofspecific criteria.
Justify the selection of one type of insuranceover another in specific circumstances.
Interpret the short- and long-range effects of aninsurance plan on financial planning stability.
Invite an insurance representative to class to discussplanning insurance programs for a variety of situa-tions, including a young adult, a growing family anda retired couple. Ask students to plan programs tomeet the needs of each situation, showing presentand future financial impact of each plan. Write a skitabout a family that chose not to buy any voluntaryinsurance coverage; include not only devastatingsituations but humorous incidents as well.
Debate the pros and cons of permanent versus terminsurance, including comparisons of costs, benefitsand cash value.
Simulate a situation where an insurance agent inter-views a young couple to determine what insuranceplan best suits their specific needs. Have studentschallenge the agent's choice if it appears that it wouldbe in conflict with the needs identified.
Planning for insurance needsCover the greatest and most important
risks firstDetermine insurance required to provide
sufficient protection and equityDecide type of insurance needed to meet
personal needs for casualty and lifeDecide on how much should be spentSeek information from two or more
insurance companies before selectinga policy and company
Review policy with agent to understandthe contractual agreements (2.7)
Review insurance program periodically,considering changing needs andconditions
Selection of auto insuranceTypes
CollisionComprehensiveLiabilityPersonal Injury Protection (PIP)Other (towing, theft, glass damage)
Factors affecting insurance costsPersonal tidying record
Number and type of ticketsAccident recordDUI (driving under the influence)Driving with expired or suspended
licenseCompletion of drivers' training
(classroom and behind thewheel instruction)
Model, style and age of carType and amount of coverageAge and sex of driver
TerritoryRegular distance driven
3 miles or lesspleasure3 to 15 miles-10% increase over
pleasure15 milesadditional cost
Full- or part-time driver
Selection of health, accident andincome replacementTypes of health and accident available
Health maintenance organizations(HMO)
Private carriersType of income replacement available
Worker's CompensationPrivate carriers
Factors affecting insurance decisionsPersonal need or choice
First dollar coverageDeductibleMajor medical
Plans available through employer orthe market
Personal budgeting goals (2.2)Insurability factors
Selection of home and personalpropertyTypes of coverage available
PropertyHomePersonal property (renter's
insurance)Perils
FireWindstorm and hail
35 38
VandalismBurglarySmokeRiot and civil disorderFalling objectsOther miscellaneous perils
Water and plumbing damageGlass breP:sage
LiabilityBodily injuryDamage to property of othersCost of legal defenseMedical payments
Factors affecting insurance decisionsPersonal choices: full coverage or
deductibleRequirements of lendors or home
mortgageReplacement costs of propertyPersonal budgeting goals (2.2)
Selection of life insuranceTypes available
PermanentWhole lifeEndowmentLimited payment lifePaid up
TermDecreasing termLeval term (annual renewable term,
5-10 year renewable term)Factors affecting insurance decisions
Long-range and short-range goalsPersonal budgeting goals (2.2)Income needs of family
2.7 Legal Documents
FIRST LEVEL
STUDENTS WILL KNOW WHAT IS INVOLVED INVARIOUS TYPES OF CONTRACTUAL AGREE-MENTS.
Describe various types of legal documents.
List a consumer's financial responsibilities re-lated to contractual agreements.
*STUDENTS WILL COMPREHEND RESPON-SIBILITIES OF THE CONSUMER WHEN ENTER-ING INTO CONTRACTUAL AGREEMENTS.
Explain the essential elements of a contract.
Explain the legal implications of contractualagreements.
Prepare a bulletin board display showing commontypes of legal documents. List elements of contractsand have students develop a list of transactionswhich they consider to be contractual agreements.Read a sample contract, explain the consumer's legalresponsibilities and discuss the accompanying finan-cial responsibilities. Examine an automobile salescontract and discuss: Who actually owns the auto-mobile until it is paid for? What restrictions are puton the car's use by the seller? What happens if pay-ments are not made when due? If the car is repos-sessed, is there a legal claim by the user for theunpaid balance? (5.5)
SECOND LEVEL
STUDENTS WILL BE ABLE TO APPLY LEGALELEMENTS OF CONTRACTUAL AGREEMENTSTO A NUMBER OF TYPES OF CONSUMERTRANSACTIONS.
Prepare a checklist of consumer responsibilitiesin contractual agreements.
Predict the effects of a specific type of lease onboth landlord and tenant.
STUDENTS WILL BE ABLE TO ANALYZELEGAL ISSUES RELATED TO CONSUMER PUR-CHASING DECISIONS.
Point out the responsibilities of both buyer andseller in specific situations.
Identify legal protection provided buyers andsellers in several legal documents.
Have students fill out prepared contract forms. Dis-cuss in class, pointing out protection provided as wellas any potential problems. Next, ask students in pairsto write a "plain language contract." Exchange con-tracts among groups and fill out the contracts. As aclass, discuss whether all the essential elements of acontract were included, and identify parts which wereunclear or misleading.
Read several landlord/tenant leases and determinethe legal effects on both tenant and the landlord.From this information, develop a checklist for sign-ing lease agreements; emphasize the importance ofadequate information and protection of all partiesinvolved.
Invite an attorney to class to discuss legal documents,especially circumstances where minors may be heldlegally competent to enter into binding agreements.Review specific contracts and situations and discusswhether a minor could be held legally competent ineach.
Simulate a situation involving a verbal agreementbetween two parties. Have students write contractswhich include their interpretations of the agreement;read several in class and determine if any informa-tion was excluded or misinterpreted. Discuss the im-portance of both the buyer and the seller understand-ing their rights and responsibilities in any contrac-tual agreement.
THIRD LEVEL
STUDENTS WILL BE ABLE TO PROPOSE WAYSTO WRITE LEGAL DOCUMENTS WHICH AREMORE EASILY UNDERSTOOD.
Rewrite several contracts to improve reada-bility.
Design a format for writing 4. -iderstandable le-gal documents.
STUDENTS WILL BE ABLE TO JUDGE THEAPPROPRIATENESS OF LEGAL DOCUMENTSACCORDING TO SELECT CRITERIA.
Appraise the protection provided by several le-gal documents.
36 3 9
Justify the selection of one contractual agree-ment over another.
Have students read several installment contracts andcircle phrases or words which are not understoodeasily or which may be misleading. Rewrite circledphrases using plain English terminology. Exchangerevised contracts among students and have themcircle any words or phrases which they feel are notunderstood easily. Next, ask students to collect sever-al sample credit contracts from catalogs and stores;have them study the contracts and circle any parts
which they do not understand. Invite a local creditmanager to class to explain installment contracts andanswer questions. Have students complete samplecontracts and write short papers explaining whatthey have agreed to fulfill in the contract. As afollow-up, have students examine a variety of install-ment contracts for identical purchases and select theone that provides the most protection to the buyerand that is understood most easily. Have studentsdefend their choices by explaining specific terms inthe contract, as well as financial and legal implica-tions to the buyer.
Nature of legal documentsCommon types of legal documents
Contractual agreementsRetail installmentRevolving creditMortgageInsurance policy (2.6)Landlord/tenant leaseDriver's license
Other typesWil Is/trustsSocial security cardsWork permits (1.4)Tax returns (2.8)Power of attorney
Elements of contractual agreementsMutual assentConsideration
A price paid to bind a promiseA promise to pay money, goods or
servicesCompetent parties
Married persons. emancipatedminors who are purchasingessentials, and persons 18 yearsof age or older are consideredlegally competent to enter intobinding contracts
Consumer responsibilities incontractual agreementsLegal implications
Understand all clauses and termsKeep copy of contractBe sure contract is dated correctlyBe sure all blank spaces are filled in or
marked outBe sure all provisions agreed upon are
written clearlyBo sure proper disclosure has been
made by seller (3.4)Be sure all cancellations are made in
accordance with the contractPerform all obligations as specified
Financial planning (2.2)Be sure installment payments car; be
made for the full term of the con-tract
Compare total costs to those ofalternative payment plans
Understand impact on spei.dableincome
:37
40
2.8 Taxation
FIRST LEVEL
STUDENTS WILL KNOW ABOUT VARIOUSTYPES OF PUBLIC REVENUE AND THE SER-VICES WHICH THEY PROVIDE.
List various types of public revenue.
Name services financed through public revenue.
*STUDENTS WILL COMPREHEND THE ECONOM-IC IMPACT OF TAXATION.
Explain the impact of public revenue on individ-uals and families.
Explain the impact of public revenue on busi-nesses.
Summarize guidelines for reporting taxes.
Give examples of various types= of taxes.
Defend the use of public or private funds forspecific services.
Make a list of public and private goods on the boardand discuss the reasons for each. Determine whichgoods and services might be provided by public fundsand which might be funded by private organizationsand business.
Discuss each type of tax levied by federal, state andlocal government and who pays each type of tax.Have students circle the taxes they or their familiespay. Next, ask students to collect newspaper articlesabout taxes; divide a bulletin board into three sec-tions with the headings: federal, state, local taxes.Pin newspaper clippings in the appropriate section.
As a class, determine the costs for a specific type ofexpenditure, such as education, and determine howmuch of the cost is paid by federal, state and localgovernments. Invite a school district b' Jget officer toclass to explain the local school budget.
Review the types of taxes levied in Oregon andanswer questions: Is there a law mandating each typeof tax? Who pays the tax? Where dr, the money go?Who collects the tax? Then, hove audents prepare abulletin board display of the r II. budget, showingwhere money comes from ant' ..l,ere it goes. Havestudents research the taxes on G.10 product such asgas, alcohol or tobacco, and discuss how much of thetotal cost is for taxes. Have students draw a graph,
illustrating the amount of taxes paid by the consumerand where taxes go.
Haw students discuss why property values increaseand whether an increase in property value automati-cally means an increase in taxes. Next, have studentsexamine and discuss a hypothetical property taxstatement and answer questions: What is theassessed value of the property? Which districts arelevying tax on the homeowner? How much is eachdistrict levying? What services are provided by thedistricts? How is the tax computed? When is the taxpayment due? What happens if payment is not madewhen it is due? How much of the tax bill is propertytax r4.1ief? Who pays for the property tax relief? As afollow-up, have students determine the amount ofuntaxed property in the county and the types ofproperties which are not subject to taxation.
Discuss the difference between proportional, regres-sive and progressive taxes and ask students for theiropinion as to whether tax rates should be proportion-al or whether people with more money should betaxed at a higher rate than those with less. Havestudents categorize types of taxes under three head-ings: progressive, regressive, proportional. Deter-mine which is the longer list and which is the shorterlist, and what this says about the tax system.
Several bridges were destroyed during a volcaniceruption of Mount St Helens. Have students discussway', to fund construction of new bridges and whichlevel of government would provide the funds. Discusswhether funding would utilize the "benefits prin-ciple" or the "ability-to-pay principle."
SECOND LEVEL
STUDENTS WILL BE ABLE TO APPLY PRIN-CIPLES OF TAXATION TO VARIOUS INCOMEBRACKETS AND POPULATIONS.
Predict the effects of different types of taxationon specific situations.
Relate the consequences of increased taxation tospendable income.
Modify tax liability through use of appropriatespecial forms,
Compute taxes using a tax table and otherappropriate information.
38 -4j
Use the appropriate tax form for specific situa-tions.
STUDENTS WILL BE ABLE TO ANALYZE THEINFLUENCE OF PUBLIC REVENUE ON THEAVAILABILITY OF PUBLIC AND PRIVATEGOODS AND SERVICES.
Point out pes of goods and services whichare provide% ) a single level of government.Illustrate the economic effect of public as op-posed to ,..-ivate goods and services in specificsituations.
Have students compute their own income taxliabilities, considering income, number of exemp-tions, deductions for medical costs, interest paymentsand charitable contributions. Compute employer'scost for unemployment, mass transit (if applicable),social security and other taxes in a given situation.
Have students complete their own federal and stateincome tax forms, using the short form. Ask them tolist the types of records which they should save fortax reporting; discuss reasons for saving each. Then,ask students how much of their total incomes are nottaxed and what types of items are subtracted fromincome before figuring taxes.
Ask students to discuss whether property taxes on a$70,000 home are proportional, regress;ve or pro-gressive for: an elderly couple living on social secu-rity income, a young family with a large and growingbusiness income. Next, have students discuss: whoactually pays corporation tax on net income earned inOregon; why government doesn't tax all of the profitson the sale of long-term investments; how a cityincome tax might affect business in the area.
Have students research a school budget item, andattend a local budget meeting to ask questions anddiscuss issues. Share findings as a class.
Play the game developed by the Oregon Departmentof Revenue which distributes play money to studentsrepresenting two different income levels. Distributetax bills based on proportional, regressive and pro-gressive taxing methods. Following completion of thegame, have students discuss how the tax burdendiffers fur a relatively poor family and for a relative-ly wealthy family under various systems.
THIRD LEVEL
STUDENTS WILL BE ABLE TO DOCUMENTTHE ECONOMIC IMPACT OF TAXATION ANDTHE PROVISION OF GOVERNMENT SERVICESON INDIVIDUALS, FAMILIES AND BUSINESSES.
Design a plan which changes the tax structurein a specific situation.
Relate the effects of increased income and prop-erty taxes on spendable income.
Describe the effects of increases or decreases intaxation on spendable income in specific situa-tions.
STUDENTS WILL BE ABLE TO JUDGE THENEED FOR PUBLIC REVENUE TO PROVIDEGOODS AND SERVICES.
Summarize the effect of providing private ser-vices as opposed to public services in selectedsituations.Support the decision for providing public goodsin various situations.
Have students simulate a state legislative session ora session in the U S Congress. Assign students to belegislators, taxpayers, and lobbyists representing pri-vate industry, all with such special concerns as: a newprison, developing synthetic fuel, heat for thehomebound, low-income senior citizens, wildlifehabitat, rehabilitation for alcoholics, funds for educa-tion, Veterans' loans, low cost loan for a larger lum-ber mill that is going out of business, increasedsalaries for state police. Student legislators need todecide which programs to fund, how much to fund,and where to get the funds. Taxpayers and lobbyistspresent reasons for needing the programs and pos-sible ways to fund the programs through either thepublic or private sector. Ask all sides to show theeffect of reduced or additional taxation on varioussegments of the public and private sectors.
Have students discuss the following situation. A firedestroyed a small schoolhouse, due to the fact that aneighboring fire district did not respond immediatelyto the fire because taxpayers in the school districtvoted against funding fire services. Project presentand future solutions for this problem.
Prepare a bulletin board display showing examples ofservices provided by local property tax dollars; debatealternate ways to provide these services other thanthrough property taxes.
Have students discuss what it would be like to live inPortland if there were no government services. Listtypical government services provided in a city thesize of Eugene and an area with the population of lessthan 900. Determine which services are the same onboth lists and which services differ.
Economic impact of public services onindividualsTypes of public revenue
Federal governmentIncome tax
IndividualCorporate
Selective sales and gross receiptsCustoms dutiesMotor fuelAlcoholic beverageTobacco productsPublic utility
Death and giftCharges and miscellaneous gen-eral revenue
Postal serviceNatural resourceHousing and urban renewalWater transport and terminalsInterest earningsSale of property
State governmentIntergovernmental revenue (fromfederal)
Public welfareRevenue sharingHighway
Income taxIndividualCorporate
Sales and gross receiptsGeneral salesSelective sales and grossreceipts
Motor fuelAlcoholic beverageTobacco productsPublic utilityInsurancePari-mutuel
Death and giftMotor vehicle licenseCharges and miscellaneous gen-eral revenue
EducationHospitalNational resourceInterest earningsSale of property
Local governmentsIntergovernmental revenue
From federalPublic welfareEducationGeneral revenue sharingHousing and urban renewal
From stateEducationPublic welfareGeneral local government
supportHighwayHealth and hospital
Income tax (individual)Sales and gross receipts
General salesSelective sales and gross re-
ceipts
Public utilityPropertyCharges and miscellaneous gen-eral revenue
EducationHospitalNatural resourceLocal parks and recreationSewerageHousing and urban renewalAirportsParking facilitiesInterest earningsSale of propertySpecial assessments
Types of services financed by publicrevenue
Federal governmentGeneral expenditure
Selected federal programsNational defense and in-
ternational relationsPostal serviceSpace research and
technologyEducation servicesSocial sen.te and incomemaintenance
Public welfareHospitalHealth
TransportationHighwayAirportWater transport and ter-
minalsPublic safety
Police protectionCorrections
Environment and housingNatural resourcesStabilization of farm process
and incomeParks and recreationHousing and urban renewal
Governmental administrationInterest on general debt
Insurance trust expenditureOld age, survivor, disability and
health InsuranceState government
General expenditureEducationSocial services and incomemaintenance
Public welfareHospitalHealth
TransportationHighwayAirportWater transport and terminal
Public safetyPolice protectionCorrectionsProtective inspection and
regulationEnvironment and housing
Sewerage
40
13
Natural resourcesParks and recreationHousing and urban renewal
Government administrationInterest on general debt
Liquor store expenditureUtility expenditureInsurance trust expenditure
Local governmentGeneral expenditure
EducationSocial services and incomemaintenance
Public welfareHospitalHealth
TransportationHighwayAirportParking facilitiesWater transport and ter-
minalsPublic safety
Police protectionFire protectionCorrectionsProtective inspection and
regulationEnvironment and housing
SewerageSanitation other than sew-
erageNatural resourcesParks and recreationHousing and urban renewalGovernmental adminis-
trationInterest on general debt
Liquor store expenditureUtility expenditure
Water supplyElectric powerTransit systemGas supply
Insurance trust expenditure
Impact on individuals, families andbusinessesIn relation to
Spendable IncomeProvison of servicesPublic vs private services
Effect of type of taxProgressiveRegressiveProportional
Guidelines for reporting taxesKeep accurate records, including all
sources of income, all deductibleexpenses (if appropriate)
Read tax form instructions carefullyUse accurate computationsLearn to read tax tablesPay on time to avoid penaltyKeep records for at least five yearsComplete appropriate special forms
HARRPProperty tax relief form
3.1 Credit Availability and Use3.2 Credit Selection
3.3 Credit Problems3.4 Consumer Credit Laws
4 4
credit3.1 Credit Availability and Use
FIRST LEVEL
STUDENTS WILL KNOW FACTORS WHICH AF-FECT THE USE AND AVAILABILITY OF CREDIT.
Define credit.
List factors which influence the availability anduse of credit.
Name the responsibilities of consumers andcreditors in specific transactions.
List legal uses of credit reports.
List the various responsibilities of creditbureaus.
STUDENTS WILL COMPREHEND HOW PERSON-AL AND ECONOMIC FACTORS INFLUENCE THEUSE OF CREDIT AND ITS AVAILABILITY.
Predict which consumers should receive creditin specific situations.Explain various personal and economic factorswhich influence the availability of credit.
Summarize the responsibilities of the consumerto the creditor in terms of handling credit as aresponsible consumer.
Ask students to write short paragraphs definingcredit; discuss as a class. Survey the class to deter-mine how many students have used credit in someform. Discuss reams., for its use; ie, convenience,emergency needs, immediate purchasing ability, per-sonal preference. Next, discuss economic conditionswhich influence the availability of credit to the con-Rumor, the role of credit in the total economy, andhow the Federal Reserve Board affects the availabil-ity of credit. As a class, discuss the responsibilities of
the consumer to the creditor, the consumer to self,and the creditor to the consumer. Ask students todevelop a skit illustrating obligations and respon-sibilities of using credit in various situations.
Invite a representative from a credit bureau to classto discuss: why a credit bureau is needed and whomay use its services; the types of information collect-ed by a bureau; what is involved in a credit report, theinformation reported and how often it is brought upto date; the importance of credit reports; how individ-uals can review their own reports; how individualscan protect their own credit records. As a follow-up,have students review a sample credit report anddiscuss information and ratings reported and appro-priate uses of such information.
SECOND LEVEL
STUDENTS WILL BE ABLE TO APPLY PRIN-CIPLES OF CREDIT USE AND AVAILABILITY TOVARIOUS SITUATIONS.
Predict the effects of various economic condi-tions on credit availability and use.
Show how credit use affects credit reports.
Modify personal budgets to reflect an install-ment purchase.Predict the consequences of using credit in vari-ous situations.
*STUDENTS WILL BE ABLE TO EVALUATE THENEED TO USE CREDIT IN VARIOUS SITUA-TIONS.
Point out the advantages and disadvantages ofusing credit in specific situations.
42
Determine when a consumer should receivecredit in specific situations.
Point out how credit reports affect credit avail-ability.
As a class, review the business section of a newspaperor a recent financial or business journal to determinethe current availability of credit and current interestrates. Discuss whether the prime rate has increasedor decreased and what effect this has on interest ratesand the availability of money. Generalize howeconomic conditions affect credit use.
Discuss individual and family situations such as: toomuch use of credit results in repossession or a defi-ciency judgment; a furnace malfunctions because of afamily's hesitancy to use credit to finance repairs; acredit balance maintained at the allowable max-imum. How might such situations affect individualand family budgets and credit records? Next, dividethe class into groups and have each determine theadvantages and disadvantages of using credit; dis-cuss as a class. Show the. class how to examine acredit application to determine whether an applicantis qualified to receive credit. Discuss how personalfactors influence whether an applicant receivescredit, including information contained in an individ-ual's credit report.
THIRD LEVEL
STUDENTS WILL BE ABLE TO INTEGRATEPRINCIPLES OF CREDIT USE INTO VARIOUSSITUATIONS.
Devise a plan for use of credit based on variouspersonal and economic considerations.
Summarize the potential impact of varioustypes of indebtedness in specific situations.
STUDENTS WILL BE ABLE TO JUDGE THEAPPROPRIATENESS OF USING CREDIT WHENPURCHASING GOODS AND SERVICES.
Justify using or not using credit.
Interpret the impact of personal and economicconditions on the use of credit.
As a class, review hypothetical case studies of specifictypes of individual and family situations involvingthe use of credit and determine what type andamount of credit, if any, could be used in each situa-tion. Choices should be based on: an analysis of cur-rent indebtedness and income level, a review of themost current credit report, how spending patternswould be readjusted, research on the cost of usingcredit currently as opposed to delaying the purchase.Next, review several hypothetical individual andfamily budgets and identify fixed expenditures whichreflect installment purchases or the use of credit foressential services as opposed to those which are op-tional. Ask students to write parsgraphs describinghow degrees of indebtedness reflect the financialgoals of an individual or family; statements should besupported thr nugh analysis of indebtedness in termsof costs and 1.,.tential for making repayment on thepart of the individual or family.
Factors affecting credit avallabilityPersonal factors (lendor considerations)
Regularity of incomeLength and stability of employmentPossible reduction in incomeAmount of income currently obligated
to Installment paymentsAmount of discretionary income
availablePrior repayment recordJoint obligationCollateral, if requiredPersonal litigation recordPurpose for seeking credit
Other factorsBusiness conditionsEconomic climateFederal Reserve monetary policyUsury laws and other regulations
Advantages and disadvantages ofusing creditAdvantages
Is available In emergenciesAllows for immediate use of product
or service; special opportunitiesAllows for budgeting of major
purchases over period of timeEstablishes credit record
Establishes record of purchasesConvenient
DisadvantagesFuture income is committedTime purchases cost more than cash
purchasesCan lead to overspending, linen
cial problems, Impulse buyingMay limit comparative shopping
Responsibilities of credit useConsumer responsibilities to self
Check reputation of firm wherocredit purchase will be made
Assure that all aspects of the contractare understood prior to signing (2.7)
Learn how to 1111 out credit applicationReview bill and report errors (3.4)Review bill and report errors (3.4)Keep a copy of current charge slipsShop for best price and terms
Consumer responsibilities to creditorsLimit obligations to amounts which
can be repaid as agreedMake all payments promptlyContact creditor immediately if there
is an Inability to pay as agreedFulfill all terms of credit contract
Creditor responsibilities to consumer
43
Comply with all federal andstate consumer credit regulations; W
Presents an accurate printedstatement of the transaction
Corrects billing errors when re-ported
Reports credit information ac-curately
Clears credit records if mistakesare made
Avoid knowingly exceeding thecredit capacity of the consumer
Guidelines for credit reportingResponsibilities of credit bureaus
Issue credit reportsLimit reporting to proper inquirersMake reasonable effort to provide
accurate and current informationMaintain confidentiality of recordsComply with Fair Credit Reporting Act
Specified uses of credit reportsGrant credit or collect accountsUnderwrite insuranceDetermine eligibility for employmentDetermine eligibility for license,
other benefit by governmental unitDetermine reliability of party in a
legitimate business transaction
3.2 Credit Selection
FIRST LEVEL
STUDENTS WILL KNOW SOURCES OF CREDITAND THE TYPES OF CREDIT WHICH AREAVAILABLE.
List sources of credit available in the local area.
Name various types of credit.
STUDENTS WILL COMPREHEND THE FACTORSINVOLVED IN SELECTING SPECIFIC TYPES OFCREDIT.
Distinguish between open- and closed-endcredit.
Explain factors which affect the dollar cost ofcredit.
Explain how characteristics of different typesand sources of credit influence selection.
Summarize the cost of credit from differentsources using appropriate tables.
Ask student volunteers to describe items which theyhave acquired through the use of credit; group itemson the board according to the type of credit. used.Next, list items commonly purchased by teenagersand have each student select one and shop for creditto purchase the item using newspaper advertise-ments or catalogs. As a class, discuss the types ofcredit available and the characteristics of each. As afollow-up, have students prepare a chart that com-pares operating policies, types of credit offered, andcredit rates for various lending agencies and catalogretail outlets as advertised. Then ask students to visitlocal lending agencies and retail outlets to determinethe types of credit offered by each. (Assign studentsto avoid duplication.) Share findings as a class andprepare another comparison chart. Why is it as im-portant to shop for credit as it is to shop for goods andservices?
Have students investigate the differences betweenopen-end and closed-end credit; discuss the character-istics of each. Next, discuss sources of credit whichare considered commonly; discuss the advantages anddisadvantages of each.
Invite a resource person to class to explain why creditcosts vary. Discuss costs other than finance chargeswhich might be included in a credit transaction (eg,
44
credit life or health insurance, computer charges,etc). In various situations determine whether thesecosts are voluntary or involuntary and whether theyare included in the Annual Percentage Rate (APR).Define for students what is meant by Annual Per-centage Rate. Show examples of contracts with theAPR circled in red; demonstrate how APR is cal-culated.
Use examples to demonstrate that the dollar cost ofcredit is the difference between the cash and creditprices.
SECOND LEVEL
STUDENTS WILL BE ABLE TO APPLY PRIN-CIPLES OF CREDIT SELECTION TO VARIOUSSITUATIONS.
Compute the cost of credit in various situations.
Show how indebtedness affects financial plan-ning in specific situations.
*STUDENTS WILL BE ABLE TO ANALYZECREDIT TRANSACTIONS ACCORDING TO VARI-OUS CONDITIONS.
Select the credit transaction which most closelymeets various personal and economic criteria.
Illustrate how a credit transaction can contri-bute to financial stability or instability.Determine the costs of using credit in light ofvarious economic climates.
Obtain current figures from several lending institu-tions and share these with the class. Using variousexamples, discuss how the size and terms of a pay-ment affects the dollar cost. Then have studentssummarize in paragraphs the advantages and pos-sible disadvantages of a large down payment andwhat effect increased indebtedness would hive on anindividual or family budget.
As a class, compare the dollar cost of credit availablethrough various lending sources, using the maximumcharge allowable; determine which is the least expen-sive source of credit. Next, compute interest costs forborrowing various amounts of money from a smallloan company. As a follow-up, discuss how currenteconomic conditions affect the cost of credit, as wellas individual borrowing potential and the local econo-my.
4
As a class, chart interest rates from a single sourcefor the past twelve months; explain factors whichcaused rates to remain stable or fluctuate. Comparethe findings with other sources. Are there any trendsin common among sources?
Compare dollar costs for financing either a car ormobile home that is new and one that is five yearsold; the length of contracts and the amounts borrowedshould be the same. Determine potential resale valueof each at a given period of time and identify whichwould be the better buy dollar-wise.
THIRD LEVEL
STUDENTS WILL BE ABLE TO INTEGRATEPRINCIPLES OF CREDIT SELECTION INTO FI-NANCIAL PLANNING.
Design a plan for short- and long-term credituse.
Reconstruct a budget to reflect several types ofcredit expenditures.
STUDENTS WILL BE ABLE TO JUDGE THEAPPROPRIATENESS OF CREDIT SELECTION INVARIOUS SITUATIONS.
Appraise the differences among various sourcesof credit using specific criteria.
Justify the choice of credit for specific situa-tions.
Ask students to develop a chart that compares thedollar cost of credit among several retail establish-ments and lending agencies. List policies, such asrepair and exchange policies which might influence aconsumer's choice as to which source to use. Deter-mine when and if an individual should select creditthat is more costly. Then ask students to selectsources of credit which would meet their standardsand support the reasons for their choices.
Have students determine major purchases or expen-ditures, such as education, which they anticipate forthe next one, five and ten years respectively; askthem to research the types and costs of credit whichmight be available to them during this period. Havestudents chart out plans for making these creditpurchases and defend their plans by calculating theincome needed to support such indebted levels ascompared with potential earnings from employment.Reassess plans using a 12 percent inflationary rateand a 6 percent increase in income per year.
Types of creditOpen-end
Thirty-day charge accountsExpected to be paid in full within
the time agreed uponNo finance chargePossible late charge if not paid
within time agreementRevolving charge accounts
A maximum amount of creditestablished
Monthly payments include afinance charge on the unpaidbalance
Bank credit cardsPermit the consumer to buy on
credit at a large number of retailbusinesses
Similar in many respects torevolving charge accounts
Have identification featuresService credit
Offered by some doctors anddentists, utility companies, drycleaners, repair services, etc
Terms are determined by eachbusiness
Closed-endInstallment credit
Long-term consumer creditContract signed before goods
deliveredSeller usually retains title to or a
security interest in goods untilfinal r ment made on contract
Specified payments made on aregular basis for a specifiedperiod of timeFinance and other charges
are acdedInterest charges vary
Cash loansBarra -Irs sign a note and other
dom. rents if loan secured,specifying the repaymentplan for money borrowed
Sources of creditRetail stores
Extend cre ' in a variety of ways forpurcham ')( goods and services
Brink!k l.1iy c,orge the maximum rates
allewablo by lawGenerally loan only to bank customers
Credit unionsRequire membership before making a
loanGenerally charge the maximum rate
allowable by state or federal charterSmall loan (consumer finance)companies
May require collateralGenerally charge the maximum rate
allowable by lawPawnshops
46 I8
Generally charge the maximum rateallowable by law
Do not lend amounts comparable tofull value of property pawned
May sell property if loan is not repaidon time
Usurious lendersMay be private parties unaware of
usury lawsAre non-licensed lenders
OtherAgencies providing educational loansUtility companiesSales finance companiesHealth care professionsInsurance companies (loan against
cash value)Friends and relativesGovernment subsidized or guaranteed
loans
Factors affecting credit coatAmount of money borrowedLength of time borrowedAbility of borrower to repayCollateral or security offeredCurrent interest rateOther finance chargesMethod used In computing the costSource of credit availableType of credit selectedLegal restrictions (3.4)
3.3 Credit Problems
FIRST LEVEL
STUDENTS WILL KNOW HOW TO PREVENT ORRESOLVE CREDIT PROBLEMS.
List several methods for resolving credit prob-lems.
Identify agencies or groups in the local areawhich can assist with credit problems.Identify how individuals and families can pre-vent or resolve financial crises.
*STUDENTS WILL COMPREHEND THE CONSE-QUENCES OF PROBLEMS WITH CREDIT.
Explain the functions of various groups or agen-cies which help with credit problems.
Give examples of ways to resolve credit prob-lems.
Summarize the benefits of resolving credit prob-lems.
Have students brainstorm "symptoms" which mightindicate a problem with credit or financial planning.Then, simulate a situation where family membersare attempting to work out credit problems. Discusshow different members of the family can help resolvethe problem. Compare situations in two familiesone that resolves the problem and one that ignoresthe situation.
Invite a creditor to class to discuss how people canprotect themselves from credit problems. Discuss themajor reasons for such problems and suggestions forpreventing or resolving problems in the area ofcredit. Next, ank students to identify agencies orgroups in the Iccsi community which are available toassist vi ith credit problerua. Discuss who sponsorsthese agencies or groups, who they help, the costsinvc,Ived, and what services they provide.
SECOND LEVEL
STUDENTS WILL BE ABLE TO RESOLVE CREDITPROBLEMS.
Show how various agencies and groups can as-sist with credit problems.Show how a change in financial planning andexpenditures can help with overextension ofcredit.
STUDENTS WILL BE ABLE TO ANALYZECREDIT PROBLEMS.
Point out factors which lead to credit problemsin various situations.Identify potential consequences of unresolvedcredit problems.
Select a method for resolving credit problems invarious situations.
Invite a financial counselor to class to simulate inter-views with an individual and with a family havingfinancial problems. List the particulars of each caseon the board, including income and indebtedness da-ta, and ask each student to identify how the individ-ual and the family could repay debts and establishfinancial stability. As a follow-up, review severalhypothetical studies involving individuals andfamilies having problems with overextension ofcredit. As a class, determine which factors createdeach problem and what action could be taken toremedy each; discuss potential financial, emotionaland social consequences of various courses of action.
THIRD LEVEL
STUDENTS WILL BE ABLE TO FORMULATE APLAN FOR RESOLVING CREDIT PROBLEMS.
Reconstruct a budget to reflect repayment ofindebtedness.
Design a plan to eliminate credit problems.
STUDENTS WILL BE ABLE TO JUDGE THE IM-PORTANCE OF MAINTAINING CREDIT WORTH-INESS.
Interpret the effects of unresolved credit prob-lems on personal and economic conditions.
Justify the use of legal resources to resolveindebtedness.
Interpret the effects of personal collections orbankruptcy on the cost of all goods and services.
Visit a bankruptcy court or invite a lawyer to class todiscuss current bankruptcy laws as they affect per-sonal bankruptcies. Have students prepare a chart ofthe most common factors leading to bankruptcy; iden-tify to what extent lack of financial planning or lack
48
of adequate protection (2.5) can contribute to theoverextension of debt. Ask each student to write apaper sununarizing the effects of increases in thenumber of bankruptcies on the cost of credit and thecost of goods and services to the entire community.
Using various hypothetical case sttdies, have stu-dents outline plans for repaynrmt e: debts by reduc-
ing expenditures, increasing income, or liquidatingassets. As a class, discuss various ways each of thesealternatives could help repay debts in a number ofsituations. What effects might each of these ap-proaches have on the individual or different familymembers? Explore any legal resource available forproblems with debt, and determine the potential im-pact on the individual, family, and the community.
Methods of resolving credit problemsAdvise creditors of the situationSeek financial counseling from
Financial institutionsConsumer Credit Counseling Service,
IncEducational program; le, community
college classes or extension serviceDebt consolidating agenciesVarious welfare, religious or fraternal
groupsFriends and relatives
Obtain debt repayment assistanceConsumer Credit Counseling ServiceDebt consolidating agencies
Obtain legal advice or information forspecific situations
Garnishment of wagesCollection agency actionProcedures, costs and effect of
bankruptcyExplore alternatives
Increase incomeReduce debtsSell or liquidate assets
Resolve incorrect billing or charge errorsCorrect errors in credit recordReview financial planning (2.2) and
payment proceduresEliminate overextension of Indebtedness
Potential implications of tuiresolvtcredit problemsCredit denied or sources limitedCredit costs IncreaseCredit rating affected adverselyEssential goods and services, such as
electricity, not availableEmployability affected adverselyFamily tensionRepossession or foreclosure of real or
personal propertyMedical care and insurance coverage
difficult to obtainGarnishment of wagesJudgments or liens against the consumerCollectors seek repaymentBankruptcy (voluntary or involuntary)
47 50=5.4/1"..)162311FiRkei,a traldr: .A.t.
3.4 Consumer Credit Laws
FIRST LEVEL
STUDENTS WILL KNOW HOW CONSUMERSARE PROTECTED BY FEDERAL AND STATELAWS.
Name several state laws which have been enact-ed to protect consumer credit transactions.
List several federal laws which regulate con-sumer credit transactions.Outline the provisions of a federal or state lawdesigned to protect consumer credit.
Describe the rights and responsibilities of bothlenders and consumers as specified in legisla-tion.
List the legislated rights and responsibilities ofconsumers in use of credit cards.
STUDENTS WILL COMPREHEND HOW LEGIS-LATION SAFEGUARDS THE CONSUMER INCREDIT TRANSACTIONS.
Give examples of several rights and respon-sibilities defined by state law.
Summarize the provisions of several federallaws which are designed to protect consumers.
is Paraphrase the creditor's responsibilities as de-fined by a specific federal or state statute.
Ask students to investigate a variety of federal andstate consumer credit laws and report on the provi-sions of the laws, ways in which those laws protectthe consumer, protection provided to the creditor (ifany), methods for enforcing the laws.
Have students discuss the potential liabilities ofcredit card holders and various provisions of the lawwhich may provide some protection. Using a varietyof hypothetical case studies, ask students to outlinesteps which should be taken when a credit card is lostor stolen; for each situation, define and explain thelimits of liability for the creditor. Next, examineseveral credit cards to determine in what way, if any,the creditor has provided a method for identification.Discuss the consumers' responsibilities for complet-ing such identification as their signatures in order toprotect themselves. As a class, review a loan or creditcard application to identify what information a po-tential credit grantor can ask when determining an
applicant's eligibility for credit. Discuss what infor-mation may be asked only in certain situations andthe potential effects such information has on thegranting of credit.
Invite a representative from a local lending institu-tion to class to discuss the advantages and disadvan-tages of the Equal Credit Opportunity Act on lendinginstitutions and potential borrowers. Discuss whateffect, if any this Act has had on the cost of credit.Discuss the provisions of the Fair Credit Billing Actand identify procedures for consumers to follow if abill is in error.
SECOND LEVEL
*STUDENTS WILL BE ABLE TO APPLY CON-SUMER CREDIT LAWS TO INDIVIDUAL SITUA-TIONS.
Prepare a chart depicting the legal limits ofspecific credit transactions.
Prepare a checklist of consumer and creditorresponsibilities for various laws.
Show how legislation affects costs of goods andservices in specific situations.
STUDENTS WILL BE ABLE TO ANALYZE THEEFFECTIVENESS OF CONSUMER CREDITLEGISLATION.
Identify specific situations where legislation in-fluences resolution of consumer credit problems.
Point out the advantages and disadvantages ofconsumer credit legislation in various situa-tions.
Chart current maximum loan charges for a variety oflendors.
Review various types of retail installment contracts,pointing out the various items disclosed. Comparethose items disclosed with those required by the truthin lending provision. Determine the rights and re-sponsibilities of both creditor and consumer in eachinstance. Next, review sample leasing contracts forproper disclosure of credit charges. Determine whatlimitations, if any, on consumer obligations are pro-vided in the lease.
Simulate a situation where a credit grantor refusedto grant credit. Discuss the action taken by both the
48 51
credit grantor and consumer, and determine whatactions might have helped to resolve the situation.
Invite several retailers to class to share their opinionsabout how much certain legislation has increased thecost of goods and services in the marketplace. As aclass, research the cost of certain safety equipmentfeatures required on new automobiles and calculatethe percentage of the total cost for such safety fea-tures.
THIRD LEVEL
STUDENTS WILL BE ABLE TO RELATE HOWLEGISLATION INFLUENCES CONSUMERCREDIT.
Revise a specific law or regulation in such amanner as to change the protection providedconsumers.
Explain the possible effects of a specific law onconsumer credit.
STUDENTS WILL BE ABLE TO JUDGE THEADEQUACY OF CONSUMER CREDIT LEGISLA-TION IN VARIOUS SITUATIONS.
Appraise consumer credit contracts for inclusionof specific legislation.
Justify the need for an increase or decrease inconsumer credit legislation.
Contrast the costs of consumer credit legislationwith the benefits.
Review Oregon's community property rights and de-termine the possible effects on family finances andconsumer credit. Revise or write legislation to in-crease protection for all family members.
Divide the class into research groups and assign eachgroup a specific law or regulation to investigate.Have groups prepare justifications for proposedchanges which the group suggests; rewrite legislationto include changes, and interpret what effectschanges would have on both buyers and sellers. Tallychanges as either pro-consumer or pro-seller and dis-cuss why there might be an inclination in one direc-tion or another, if applicable.
Ask students to prepare a sample loan application,including information they would like to know iflending money to an individual. Review the applica-tion in terms of compliance with Regulation B. Then,have students make a chart of all items identified byRegulation Z which must be disclosed in credit trans-actions. Review two sample contracts and determinethe type of information needed for each required itemof disclosure. Determine which contract, if either,provides for the best disclosure of information.
Invite a loan officer to class to discuss what effect, ifany, Oregon's reduction in the age of financial re-sponsibility to age eighteen has had on the cost ofloans to young adults. What advantages and disad-vantages might this have in terms of availability ofcredit to young people. Have students take a positionon this change and defend their positions.
Federal laws related to creditConsumer Credit Protection Act
Rights of consumers related to creditcards
Can be issued only upon requestexcept for renewals and sub-stitutions
Limits liability for unauthorized useNo liability after notification in
writing of loss or theft of cardLiability maximum is $50 (no
liability if issuer does not givenotification of potentialliability and method ofidentification, such assignature panel orphotograph)
Issuer must provide cardholderwith a self-addressed.prestamped notification card
Truth in Lending Provision (Regulation Z)Requires lendor to disclose
Cash priceCash down paymentTrade-InTotal down paymentAmount financed, Including unpaid
balance of cash price, insurancecosts and filing costs, and othermiscellaneous itemized costs. ifany
Finance charge (dollar amount)Annual Percentage Rate (APR)Deferred payment price (total
amount to be paid undercontract)
Date finance charges begin toaccrue
Number, amount, and due date ofpayments
Description of security interest, ifany
Method of computing unearnedfinance charge (in case of pre-payment)
Various other items pertaining tothe transaction, if applicable
Truth in Leasing Provision (Regulation Z)Imposes similar disclosure require-
ments as Truth in Lending for costsand terms of leases
Sets up limits on consumers'obligation at the end of lease andmethods of determining the
49
obligation when there is a disputeFair Credit Billing Act
Procedures to correct billing mistakesin open-end credit and credit cardtransactions
Creditors must make disclosure of thisprocedure to the consumer whenaccount first opened and at leasttwice annually thereafter
Procedure if bill in error or furtherexplanation needed
Contact creditor in writing within60 days of postmarked date onthe bill (phone call does notpreserve legal rights)
State on paper. separate from bill,the name, account number,explanation of problems, andamount of error
Send correspondence by certifiedmall, return receipt requested
Creditor's responsibilitiesWithin 30 days must acknowledge
receiving complaint, unless errorhas been corrected
In certain circumstances must alsonotify the credit bureau
Within 90 days must reinstate thebill and either make correction,or send an explanation of reasonthey believe bill Is correct
During the period of investigationConsumer does not have to pay
disputed amount but isresponsible for remainder of bill
Creditor can not take action tocollect or report disputedamount as delinquent
After reinvestigation ;periodCreditor may report amount as
delinquentConsumer has 10 days to respond
in writing if refusing to payConsumer must notify other
creditors that the amountremains disputed
If the bill was In errorConsumer has no responsibility for
finance charges on disputedamount
Creditor may give refund or creditaccount for excess payments
Equal Credit Opportunity Act (Regula-tion B)
Prohibits discrimination on the basisof
SexMarital statusRaceNational originReligionAgeReceipt of income through public
assistanceDoes not guarantee credit to specialgroups, but specifies that creditworthiness must be evaluated in thesame manner for all people, namely
IncomeExpensesDebtsReliabilityCredit history
Prohibits creditors fromAsking information about child-
bearing or family plansRequiring a co-signer, if not
required of other applicants insimilar situations
Requiring information about one'sspouse unless
Spouse will use account
'Laws current as of April 1981. Proposedchanges under legislative consideration.
Spouse will be responsible foraccount
Spouse's income Is being reliedupon
In community property states,information regarding spousemay always be requested(Oregon is not a communityproperty state; Washingtonand California are)
Refusing to maintain accountsafter a change in name ormarital status or reaching acertain age or retirement
Refusing to consider con-sistently received alimony orchild support
Applicant has the right toHave joint account information
listed in names of bothShow how the credit history of a
spouse reflects in creditworthiness
Reveal child support or alimony asincome
Know whether the application wasaccepted or rejected within 30days after filing
Know if adverse action is taken ona credit application
Oregon laws related to credit andcredit use*Usury law
Basic rates10 APR If borrower Is individual12 APR if borrower is business
ExceptionsNo rate limit on amounts of more
than $50,00012 APR on loans to individuals if
secured by real propertyBanks may charge 15 APR, except
consumer loans secured byresidential real property (12 APR)
Retail installment contractsTruth in lending disclosures must be
madeNo maximum finance charge
established except for motorvehicles and mobile homes
Automobile and mobile home retail in-stallment contracts
New cars (current or previous modelyear)
5350
Approximate 14.5 APRRate varies slightly with length of
contractNew mobile homes (current or pre-vious model year)
10 to 16.5 APR depending onlength of contract
Lower rates on longer contractsOther new mobile homes and cars(older than previous model year) andused (not older than two model yearsprior to current year)
18 APR (rate varies with length ofcontract)
All other used cars and mobile homesApproximiately 21.5 APR (rate
varies with length of contract)A minimum finance charge of $25
can be made regardless ofresulting APR
Small loan (consumer finance) com-panies
No maximum on loans above $50,000Maximum rates of interest
36 APR on first $500 even if total ismore than $500
21 APR on unpaid balance between$500 and $2,000 (because of 36APR on first $500, combined APRwill be higher then 21 APR)
15 APR on unpaid balance between$2,000 and $5,000 (because of 36APR and 21 APR on initialamounts, combined APR will behigher than 15 APR)
19.5 APR on entire balance if loanis between $5,000 and $50,000
All dollar amounts are Subject toadjustment according to theConsumer Price Index (CPI)
Credit unionsMaximum charge for state chartered
credit unions is 10 APRMaximum charge for federal chartered
credit unions is 12 APRPawnshops
Highest maximum charge allowable is36 APR plus set up charges
Noninstitutional sources of creditSubject to usury lawIncludes friends and familyLoan sharks, by definition, usually do
not comply with legal limitations
purchase ofgoods and services
4.1 Factors Affecting Consumer Purchases4.2 The Role of Advertising4.3 Guidelines for Shoppers
4.4 Making Specific Purchases
ir,kg' 1 I I I
purchase of goods and services4.1 Factors Affecting Consumer Purchases
FIRST LEVEL
STUDENTS WILL KNOW HOW VARIOUS FAC-TORS INFLUENCE CONSUMER PURCHASES.
List personal factors which influnce consumerpurchases.
Identify economic and societal factors which in-fluence purchasing decisions.
Identify different types of markets.
STUDENTS WILL COMPREHEND THE INTERAC-TION OF VARIOUS FACTORS IN THE MARKET-PLACE.
Give examples of factors which influence con-sumer decisions in specific circumstances.
Explain how economic constraints may affectconsumers in various situations.
Explain the circular flow of money.
Have students identify and discuss personal re-sources and explain how decisions to make consumerpurchases depend upon the resources available andthe types of goods and services sought; eg, purchas-ing a bicycle as opposed to purchasing a car. As aclass, discuss differences among consumers in theuse of personal resources when making consumerpurchases. Next, display pictures from magazines onthe bulletin board under the captions "Needs," "Con-veniences," "Luxuries." Have students compare theirown needs and desires with those displayed anddiscuss similarities and differences. List typicalgoals for teenagers in the area of making purchasesand discuss factors which might influence thesegoals. How might goals for adults differ or be thesame? As a follow-up, ask students to discuss how
often they have cut back on needs and conveniencesto purchase a luxury item. Why is it important torecognize when one is attempting to satisfy an emo-tional need through the purchase of an item, andhow making such a purchase automatically narrowsother purchasing options? Follow with a group dis-cussion on major expenditures usually incurred ateach stage of the life cycle and the value of planningspending according to long-range goals.
Have students in groups study the effects of currenteconomic conditions, major technological changes,nvironmental factors and marketing techniques on
ennsumer decisions. Identify how different types ofmarket structures affect the consumer's ability tomake decisions. As a class, discuss how economicconstilsinfa may affect consumers when consumersare unfamiliar with quality of products on sale,small business managers are unfamiliar withamount of demand and extent of competition, con-sumers are unable to travel to sales.
Using a transparency, explain to the class the circu-lar flow of goods and services. Then discuss the influ-ence private markets and government partnershipshave on the consumer's share of total goods andservices produced, and the effect of inflation on anindividual's ability to purchase goods and services.
SECOND LEVEL
*STUDENTS WILL BE ABLE TO APPLY PERSON-AL AND MARKETING CONSIDERATIONS TOCONSUMER PURCHASING DECISIONS.
Relate personal factors to consumer purchasingdecisions.
Relate economic and societal factors to consum-er purchasing decisions.
52
35
STUDENTS WILL BE ABLE TO DISTINGUISHAMONG VARIOUS FACTORS WHICH INFLU-ENCE CONSUMER PURCHASING DECISIONS.
Distinguish the value of promotional techniquesin various situations.
Illustrate the impact of international trade onthe availability and price of specific products.
Have students debate whether individual and familystandards of living are determined chiefly by income,personal priorities, or goals Next, have students re-search and discuss the concept of "voluntary simplici-ty" as a means for reducing consumption, includingways the consumer can ch to conserve any num-ber of finite resources. A5n Bch student to select andapply one method of conservation that matches per-sonal priorities, such as conserving energy by switch-ing off lights when not in use; report results to theclass. Have students discuss why they chose piii-ticu-lar methods, how well their efforts succeeded, howclosely the project matches personal resources andgoals, and the economic and societal cJncerns ad-dressed through various conservation methods.Use a transparency or bulletin board to outline goalsand resources for a hypothetical consumer. Chartalternative approaches which might be followed dueto scarcity of a given resource, such as energy.
Ask students to bring examples of various promotion-al advertisements to class and display on the bulletinboard for discussion purposes. Of what value are suchadvertisements to the consumer?
Ask students to define what is meant by "the balanceof trade." Research recent changes in the import/ex-port policy of the United States. Illustrate how areduction in the supply of a limited resource, such asoil, influences the price and consumption of thatresource.
THIRD LEVEL
STUDENTS WILL BE ABLE TO RELATE PUR-CHASING DECISIONS TO CURRENT PERSONAL,SOCIETAL AND ECONOMIC CONSIDERATIONS.
Design a plan for making major purchases.
Summarize the impact of current economic andsocietal conditions on personal buying patterns.
Generate plhas for including environmentalconcerns in purchasing decisions,
STUDENTS WILL BE ABLE TO JUDGE HOW PER-SONAL AND ECONOMIC FACTORS AFFECTCONSUMER PURCHASING DECISIONS.
Appraise the relationship between the balanceof trade and consumer purchasing decisions.
Justify the purchase of one consumer item overanother for environmental, personal, or econom-ic reasons.
Ask each student to select one product to research interms of factors which influence changes in price.Predict the price of the product, considering suchfactors as fluctuations in supply and demand, in-creased regulations, and various economic conditions.Then predict whether the product is likely to increaseor decrease in price during the coming year whencompared to current and predicted rates of inflation,and defend this prediction based on trends in interna-tional trade and technological advancements.
Research the sales of automobiles and housing duringthe past year and discuss factors which have in-fluenced consumer demand, such as product cost,maintenance or upkeep, or energy supply and cost.
Ask each student to make a list of purchases whicheither are needed or wanted; group purchases accord-ing to major and minor expenditures and evaluateeach in terms of essential need or desirability. As aclass, share lists and determine which expendituresare common with fifty percent or more of the class.Discuss whether social pressures influence personalpurchasing decisions, and what types of personal andsocial impact this may have. Then, ask students toreevaluate their lists and support the selection ofthree items in terms of personal need; defend selec-tions in terms of energy efficiency and environmentalimpact.
Personal factorsResources available
TimeMoneyEnergySkillsAbilityCredit
Individual or family characteristicsAge, sex, marital status, number and
health of family members, stages in
the life cycle, emotional state. cus-toms and background
Needs and wantsGoals and values
Economic and societal factorsScarcity
Resources limitedChoices requiredTrade-offs madePrices tend to reflect level of scarcity
53
Opportunity costs must be consideredPrices
Change due toFluctuation in supply and demai.dRegulationsEconomic conditions. eg:
InflationDepressionRecescionStagflation
Are measured by Consumer Price
Index (CPI)Money supply (5.1)
Supply of money fluctuatesAvailability of credit changes
Technological developmentsChange prices and products as aresult of
EducationResearch (public and private)Productivity advancement
Leads to increased productivity andincreased efficiency in the use ofscarce resources
Types of market structurePure competitionPure monopolyMonopolistic competitionOligopoly
International tradePrice and supply of products fluctuatePolitical factors affect what and how
much is imported and exportedEnvironmental concerns
Personal costs and benefitsEconomicNoneconomic
Social costs and benefitsEconomicNoneconomic
Economic constraints-ack of complete informationResource immobilitySide effects of production and
consumption (externalitiescosts or benefits)
Imperfect competitionGovernment intervention or
regulationMarkets and marketing
Types of stores and facilitiesCosts of supplying products andservices
5
54
Materials and production expenseMerchandising and promotional
expenseWage and salary expenseMargin of profit
Consumer demandCompetitors' prices and policiesProduct substitutionMarket structurePromotional techniques
Discount offersLoss leadersClearance salesOdd number pricesMultiple pricesCouponsTrading stampsContents and gamesPackagingDisplays
4.2 The Role of Advertising
FIRST LEVEL
STUDENTS WILL KNOW HOW ADVERTISINGINFLUENCES CONSUMER PURCHASING DECI-SIONS.
List sources of advertising.
List purposes of advertising.
List criteria for evaluating advertising.
STUDENTS WILL COMPREHEND THE IMPACTOF ADVERTISING ON CONSUMER DEMAND.
Explain the purposes of advertising in specificsit cations.
Summarize sources of advertising at the locallevel.
Have a contest between groups of students to deter-mine which group can name the most sources ofadvertising, emphasizing those sources used lessoften. Collect samples. Discuss various approachesused and ways consumers can evaluate advertise-ments. As a follow-up, discuss as a class the import-ance of advertising for the consumer, the seller andthe economy.
SECOND LEVEL
STUDENTS WILL BE ABLE TO APPLY ADVER-TISING TECHNIQUES TO CONSUMER PUR-CHASING DECISIONS.
Prepare typical advertisements which appeal tospecific audiences.
Show how advertisements can have informa-tional, promotional or economic value to specificgroups.
*STUDENTS WILL BE ABLE TO ANALYZE THEEFFECTS OF ADVERTISING ON CONSUMERPURCHASING DECISIONS.
Distinguish between specific types of advertise-ments in terms of objectivity.
Outline criteria for evaluating advertisements.
Over a period of a week, ask students to observe radioand television advertisements closely. As a class,discuss advertisements in terms of potential audi-ences and the types of appeal used; determine
whether subliminal techniques might be involved.Follow with a quick review of advertisements foundin popular magazines. Next, discuss ways in whichadvertising is regulated; government regulation, self-regulation and market demand. Ha,.! students de-bate the effect of each.
THIRD LEVEL
STUDENTS WILL BE ABLE TO FORMULATE AD-VERTISEMENTS WHICH COULD AFFECT CON-SUMER PURCHASING DECISIONS.
Compose a checklist for evaluating advertise-ments.
Revise an advertisement to create a particulartype of appeal.
Write an advertisement for a specific product orservice.
STUDENTS WILL BE ABLE TO JUDGE THEVALUE OF ADVERTISING TO BOTH THE CON-SUMER AND THE SELLER.
Appraise the benefits of a specific advertise-ment to the buyer and the seller.
Support the use of one source of advertising overothers in various situations.
Ask each student to write an advertisement for aspecific product or service geared to a specific audi-ence. Share as a class and discuss the potential bene-fits of advertisements for both the buyer and seller.Next, discuss the role of the consumer, manufacturerand government toward achieving higher standardsin advertising. Have groups of students evaluate ad-vertisements using a checklist which addresses thefollowing questions: What type of appeal does theadvertisement have? What does the advertisementtell about the product? Is information presented ade-quately and accurately? Is the advertisement in goodtaste? Is the advertisement factual? Does the adver-tisement appeal to a specific audience? As a follow-up, ask students with specific compliments or com-plaints about advertisements to write a hypotheticalletter to the proper authorities to register their feel-ings (ie, manufacturer, Federal Trade Commission,local television or radio stations, national networktelevision, local stores, newspapers).
56
Purposes of advertising in theeconomyPerforms an informational function
Introduces new productsExplains functions of productsIdentifies sources of products or
servicesIdentifies products or services
availableCompares products (size, price)
Performs a promotional functionCreates product and brand loyaltyEstablishes an image for a productDifferentiates a product from its
competitionPerforms an economic function
Helps finance communications; ie,magazines and newspapers
Helps finance entertainment; ie,television and radio
May stimulate the economyMay increase or decrease product
cost
Types of advertisingNewspaper, magazines and circularsCatalogs, brochures and mailing lists
Billboards and postersYellow pages of phone bookContests and promotional giveawaysRadio and televisionPackagingFree samplesDirect mail
Criteria for consumer use ofadvertisingAccuracy of informationAdequacy of informationFairness of the techniqueAppropriateness for intended audience
In good tasteDoes not annoy or irritateSufficiently realistic
Types of ethics standards andregulationsSelf-regulation by industry
Voluntary standards codeAdvertising review boards
Agency regulationFederal Trade CommissionOther
Market demand
57
59
4.3 Guidelines for Shoppers
FIRST LEVEL
STUDENTS WILL KNOW HOW SHOPPINGSKILLS AID IN CONSUMER PURCHASES.
Outline the steps involved in making a decision.
List techniques for shopping effectively.
Identify sources of information for consumers.
List types of retail outlets.
STUDENTS WILL COMPREHEND HOW SHOP-PING SKILLS ASSIST THE CONSUMER.
Explain the steps involved in making a decision.
Defend the use of a shopping list.
Summarize how shopping techniques assist con-sumers.
Explain marketing terms and their meanings.
Summarize the value of pricing statements inspecific situations.
Distinguish between various types of warran-ties.
Explain how various sources of consumer infor-mation could be useful.
Explain factors involved in choosing retail out-lets and services.
Use a transparency to explain the steps involved inmaking a decision. Next, have a number of studentsdescribe some of the most and least satisfying pur-chases they have made, why each was satisfying ornot, and if the decision-making process was utilizedwhen making various purchases. As a class, discussthe advantages of planning before shopping.
Ask students to examine magazines for informationabout tested products. Identify other sources of con-sumer information and discuss the usefulness of suchsources.
Ask students to review tr.. it own shopping habits forimpulse buying tendencies and report to the class.Discuss the effect of factors such as color and attrac-tieness of display on buying moods and what can bedone to improve buying habits.
List difficulties commonly encountered when trying
to determine a real bargain; include pricing phrasesoften used in retail stores and discuss "price" as anindicator of quality. Next, have students bringsamples of various product warranties to class anddiscuss which warranties are implied, and which areexpressed.
As a class, discuss a number of different types ofretail establishments, and identify those which arelocated in the community. Discuss each in terms offacilities and services, such as physical plant, creditand approval privileges, etc, and how these factorsaffect the consumer's choice to shop at a given estab-lishment. Then, using a transparency or chart, showtypical layouts for different types of stores; discusshow layouts affect shopper convenience and impulsebuying tendencies.
Ask students to describe potential successes and fail-ures when purchasing various types of services; simu-late situations to demonstrate how to avoid difficul-ties and handle unavoidable problems. Then, invite arepresentative from a company that provides servicesin the local area to class to discuss ways consumerscan help make services more efficient. As a follow-up,have students research and determine which repair,professional, and financial services require city orstate licenses. Discuss reasons for requiring licenses,as well as the potential benefits and drawbacks oflicensing requirements.
Have students research mail order buying and dis-cuss: the advantages and disadvantages generally;how catalog prices compare with prices in retailstores, and, if different, why; the accuracy of catalogdescriptions; whether information is provided on thecare and use of iten:s, and if such information wouldbe available as readily through a retail establish-ment; recourse available should problems occur.
*SECOND LEVEL
STUDENTS WILL BE ABLE TO APPLY SHOP-PING SKILLS TO CONSUMER PURCHASING DE-CISIONS.
Use shopping techniques when selecting aproduct or service.
Show how the decision-making process affectsbuying decisions.
Use specific consumer information to makeshopping decisions.
III 0
58
STUDENTS WILL BE ABLE TO EVALUATESHOPPING SKILLS AND BUYING PRACTICES.
Point out precautions to use when purchasingsale items in various situations.Diagram how to make price-quality compari-sons.
Select sources of consumer information to aid inspecific situations.
Ask students to make and use shopping lists whenshopping; discuss any improvements in shoppinghabits.
Compare the actual cost of an item selling for a lesserprice at a store across town with the regular price at aneighborhood store, taking into consideration trans-portation costs to the across town store. Use currenttables with cost per mile for a number of types ofvehicles.
In simulated situations, have each student selectbetween two items of equal worth to the studentwhen only one item may be purchased. Discuss as aclass how steps in the decision-making process wereutilized in each situation; discuss trade-offs andopportunity cost.
As a class, develop a checklist for evaluating theobjectivity and usefulness of various sources of infor-mation, including such features as the completenessof information made available and implied represen-tations. Discuss specific factors to consider whenseeking information from family, friends, and salespersonnel. As a follow-up, develop a consumer infor-mation center with fact sheets and resource mate-rials.
Have students research various legal requirementsprinted on labels and packages of such merchandiseas cosmetics, textile products, upholstered furniture.As a class, discuss various aspects of good labelingpractices.
Have students examine merchandise on sale throughestablishments locally and speculate as to why it is onsale, including such reasons as quality, style, over-stock, etc. Share findings as a class. As part of theirresearch, have students compare the quantity andprice of goods available on the first day of the salewith goods available at the close of the sale anddiscuss and make a list of factors to be aware of whenshopping sales. In addition, show students how to ratethe quality of several items, using 90-100 as excel-lent, 80-90 good, 70-80 above average, etc. Ask stu-
dents to utilize the formula to make price-qualitycomparisons. As a follow-up, develop guidelines forselecting services and discuss as a class.
THIRD LEVEL
STUDENTS WILL BE ABLE TO FORMULATESHOPPING GUIDELINES WHICH ASSIST INMAKING CONSUMER PURCHASES.
Develop a plan for making major purchases.Modify shopping patterns to minimize impulsebuying.
Rewrite a warranty to express quality or per.formance.
STUDENTS WILL BE ABLE TO JUDGE THE ADE-QUACY OF SHOPPING GUIDELINES IN MAKINGCONSUMER PURCHASES.
Justify the use of the decision-making process inmaking consumer choices.
Justify the selection of a product or servicebased on consumer information.
Group students into hypothetical family units andask each "family" to list various items which theywould like to purchase. Group items as major orminor purchases, and whether an installment pur-chase is involved. Then have each family agree uponthree items which they would like to purchase; rankitems according to priority; establish a plan for mak-ing the purchases. Have students support therationale of their intent by planning how they canreduce impulse purchases. Ask students to recordtheir purchases for a week and report their success orfailure.
Federal law requires that specific disclosures bemade in most warranties involving consumer goods.Have students review sample warranties and checkfor the following in each: Is the warranty implied orexpressed? Does the warranty cover the wholeproduct or just part of it? What part or parts? Doesthe warranty assure the performance of the product?What is the product made of and how long will it last?What replacement or refund is provided in case ofdefects or failure? Then, ask each student to rewriteone of the warranties so that the type of coverageprovided by the warranty is changed. Discusswhether student warranties are implied or expressed,and identify similarities and differences among war-ranties. Considering warranty agreements, as well asproduct features and price, ask each student to selectone product over the others and defend the choice.
Ask each student to simulate the purchase of aproduct using a variety of consumer information andthe decision-making process, and support the choice
of the product over one that might have been pur-chased on impulse.
Guidelines for planningpurchasesDistinguish between immediate
and long-range needsUse the decision-making process
Define the problemDetermine reasonable alternativesSeek appropriate informationWeigh alternative choices, con-
sidering the trade offers andopportunity costs
Determine the best choiceReevaluate selection
Plan for long-range needsLocate items neededCheck store policies on salesWatch for sale announcements
Plan ahead by using a shopping listInclude sizes and amountsSpecify brands preferred and price
limitsOrganize list by store locations and
layouts
Techniques for shopping effectivelyUse precautions when purchasingbargains
Examine merchandise carefully assale items are usually not return-able
Consider possible costs for upkeepand repair
Compare expense involved inshopping, such as babysitter,parking, transportation, to saleprices
Check warrantiesCheck the original price of sale itemsShop the first day of sale to ensure
greatest selection of merchandiseShep the last day of sale to find items
lad for quick saleUnderstand marketing terms
"Sale" means offering goods at a
price, not necessarily at areduced price
"Clearance" means a desire to sellall merchandise listed, but notnecessarily at reduced prices
"Liquidate" means to turn intocash, but not necessarily to sellat lower price
Check for short weights and slack fillsKnow value of pricing statement usedby retailers
Statements of little value"Manufacturer's list price""Suggested retail price""Comparable value"
Suspicious statements"Price $25, worth $40""Everyday low price""Best buy in town"
Generally trustworthy statements"Our regular price is . . .""Similar merchandise was sold
in our store for . . ."Avoid impulse buying
Be conscious of emotional moodswhen shopping
Avoid shopping during period ofStressHungerCrisisLoneliness
Check price-quality relationshipsCheck unit prices to make price-
quality comparisonsUse formula for making difficult
price-quality comparisons
Price /Duality ratingBased on 100 points
Example: 8.5Item 1 price $10 Points - 85
6.6Item 2 Price $12 /Points - 80
60 C2
6.0Item 3 Price $15 Points - 90
Check warrantiesFederal law requires specific disclo-
sures in most warranties involv-ing consumer goods
Typesimpliedconsumer goods sold by
merchants are understood to beof at least fair average qualityunless the seller clearlydisclaims any such warranty
ExpressedAnything positive saidor written about the quality orperformances of consumergoods
Use sources of consumer informationPublications
Consumer Report and BuyingGuide issues
Extension service publicationsChanging TimesGovernment bulletins
Informative labelsMay include
What the item is made of(ingredient lEoeling)
Size and numberGradePull -date or package dateCare neededInstructions for usePerformance informationdame and address of man-
ufacturerBrand names
Do not necessarily guaranteequality
SalespeopleFamily and friendsAdvertising (4.2)
4.4 Making Specific Purchases
FIRST LEVEL
STUDENTS WILL KNOW FACTORS WHICH AF-FECT THE PURCHASE OF SPECIFIC GOODSAND SERVICES.
Identify considerations when selecting transpor-tation.
Describe aspects which influence housing deci-sions.
List factors which influence the purchase ofsnack foods.
List considerations when purchasing clothing.
Outline factors affecting the selection of dur-able goods.
STUDENTS WILL COMPREHEND THE IMPACTOF SPECIFIC PURCHASES ON FINANCIAL STA-BILITY.
Explain the advantages and disadvantages ofpublic transportation.
Explain the legal implications of housing invarious situations.
Ask students to visit a used car lot or invite a carsales representative to class to review points to checkwhen purchasing an automobile. In addition, havestudents discuss the cost and availability of publictransportation in the local area.
Invite a panel of renters and home owners to class todiscuss considerations influencing housing decisions,including the advantages and disadvantages of rent-ing and buying.
Show pictures or slides of different types and styles ofhousing; as a class discuss how the selection andsuitability of housing depend upon individual andfamily characteristics and personal preference.
Invite a real estate agent to class to discuss legalaspects involved in purchasc. and leasing agreements,including the rights and responsibilities of both ten-ants and landlords. Ask a banker or representativefrom a savings and loan association to class to discussfinancial aspects involved in purchasing a home.
Discuss the total costs involved in owning a home,establishing how much individuals and families can
afford for housing (including discussion of energyconservation and possibilities of solar technology).Discuss the need for young families to plan carefullyin order to be in a position to enter the housingmarket.
Ask each student to keep a record of snack foodspurchased over the period of one week; determinefactors which influenced each purchase, as well ashow much money was spent.
Discuss factors which influence decisions to purchaseclothing. Relate current clothing fads to fads in thepast by checking clothing styles in school annuals forthe last three decades.
Ask groups of students to select certain brands ofstereo equipment and investigate warranties, price,construction and safety features, as well as otherproduct features offered by each. Discuss how thesedifferences among brands can help meet individualneeds and desires.
SECOND LEVEL
*STUDENTS WILL BE ABLE TO APPLY SHOP-PING SKILLS WHEN BUYING SPECIFIC GOODSAND SERVICES.
Solve transportation problems by identifyingappropriate alternatives.
Prepare a plan to meet short- and long-termhousing needs and wants.
Relate economic conditions to the cost of food.
Show how clothing purchases reflect personal,economic, and social considerations.
Use a variety of sources of consumer informa-tion to buy specific durable goods.
STUDENTS WILL BE ABLE TO ANALYZESPECIFIC PURCHASING DECISIONS.
Select the most appropriate mode of transporta-tion for specific situations.
Select the most appropriate housing for specificsituations.
Select food which meets personal, economic, andsocial needs.
Select the most appropriate clothing purchases
6263
for specific situations.
Select the most appropriate durable goods pur-chases for specific situations.
As a class, research newspaper advertisements andarticles in magazines concerned with buying andservicing a:..omobiles, warranties, current transpor-tation costs, and potential maintenance and repairperformance. Then, ask students to make decisionsabout transportation for various circumstances con-sidering all forms of available public transportation,what they took into consideration in risking deci-sions, sources of information, and the costs involved.If a student decides to purchase a means of transpor-tation also include the type, model, accessories, andcondition of the vehicle, factors checked in warranty,if any, and projected maintenance and repair factors.
As a class, construct a chart comparing the cost ofhome mortgage loans with different interest rates;also identify other factors influencing the amountpaid for a home, such as the amount required fordown payment and the length of time allowed forrepayment.
Have students review a hypothetical property taxstatement for the local area and compute what shareof taxes goes for schools, fire and police protection,and city and county government. Compute tax billsfor individuals and families with different levels ofproperty tax evaluations. (2.8)
Have groups of students research articles related tohome purchasing and renting considerations; thenlist or simulate mistakes commonly made and pos-sible consequences of such mistakes.
Have students identify ways consumers can extendtheir food dollar, such as: buying in quantity; pur-chasing meat substitutes and extenders, and lessexpensive cuts of meat; buying the most nutrition forthe money; using foods which are in abundance; shop-ping through newspaper advertisements. Ask stu-dents to plan nutritious menus on a low-cost budgetutilizing money saving techniques identified above.
Divide students into family groups and prepare shop-ping lists based on the menus they have planned inadvance. Then ask each student in the group to selecta different store and calculate the total price current-ly for all the items on the shopping list. As a class,compare individual item prices and total costs. Iden-tify factors which affect total cost. Identify factorswhich affect the cost of food, including the form offood (fresh, canned), the type of packaging, cost perserving, brand, etc.
Have students make decisions about food considering
such factcre. aA clst. 1H-olden-Is toconsider in tr).,; !hie ;qv. r;arat ion thatis most erce plant protein shouldbe used as a 1.3a;... .t.1, ate for a.:ikna:. protein (food chainconsideratioos'i, -whether use a convenience orhomemade product, and whether to eat at home or ata fast food restaurant.
Ask students to compute clothing budget allowancesfor individuals and families given various incomelevels and using sample budgets or suggested per-centages. Relate information to individual and fam-ily characteristics and lifestyle to determine whetherbudgets would be sufficient. As a class, discuss waysto save money on clothing purchases, such as: com-parison shopping, interpretation of information,evaluation of quality, planning ahead (shoppingthrough newspaper advertisements), and sewingone's own garments. As a follow-up, ask each studentto plan a personal clothing budget.
Obtain several sample hang tags and describe infor-mation on the tags concerning product flammability,as well as specific care instructions. Next, evaluateeach garment in terms of suitability for a person witha specific handicap; discuss possible solutions.
As a class, discuss techniques for saving money whenpurchasing furniture, such as: having an overall planand budget, evaluating quality and design, buyingpieces with multiple uses, recycling materials foraccessories, shopping through newspaper advertise-ments. Then ask groups of students to research vari-ous aspects of purchasing furniture; develop a list ofspecial points to check before buying wooden furni-ture, upholstered furniture, mattresses and boxsprings. Visit a furniture store or invite a furniturestore representative to class to answer questionsabout purchasing furniture. As a follow-up, havestudents determine furniture needs for an individ-ual's or couple's first apartment; develop a low-costfurnishing budget utilizing money saving techniquespreviously identified.
Have students research the energy efficiency of ma-jor appliances and select those which are most effi-cient.
THIRD LEVEL
STUDENTS WILL BE ABLE TO INCORPORATESHOPPING SKILLS AND PURCHASING DECI-SIONS INTO FINANCIAL PLANS.
Devise a plan for meeting transportation needsthrough the use of public or private transporta-tion.Explain the effects of increased housing costs on
63
eet
financial planning in various situations.
Modify food purchasing habits to reflectchanges in food supply and cost.Explain Low clothing purchases might changewith vario,... , levels of spendable income.
Design a long.-erm plan for purchasing majordurable gocJcisl under specific economic condi-tions.
STUDENTS WILL E ABLE TO JUDGE THE ADE-QUACY OF GOODS AND SERVICES PUR-CHASED.
Justify specific decisions about transportation.
Interpret the social and economic impact ofhousing in various situations.
Justify the selection of food according to variousconsiderations.
Support the se.iection of a clothing item in termsof purchasing considerations.
Su,)port the selection of durable goods based onshopping skills and other considerations.
Have students review their previous transportationdecisions and modify these decisions in terms of con-ditions currently, as well as additional research. Sup-port a choice in terms of public or private transporta-tion, considering energy use, cost, convenience and
personal preference.
Have students research various types of housingavailable in the local area, considering economic,social and personal considerations. Develop a com-munity plan which addresses short- and long-termhousing needs and desires, and support the plan'srationale through modification of financial plans andexpenditures. Develop an alternative plan to providefor changes in economic conditions which were notprovided for initially.
Ask each student to plan a nutritionally balancedmenu that reflects a reduction in food supplies; thereduction should emphasize meat in particular, dueto its importance in the food chain and its potentialfor escalating cost. Justify the menu selected in termsof the personal, social and economic criteria used.
As a class, review criteria involved in the selectionand purchase of clothing. Given three different in-come levels, ask students to justify the selection of aclothing wardrobe for each situation.
Establish a list of major durable goods needed by abeginning family and prioritize the three most essen-tial items. After analyzing brand name models andfeatures, have students utilize comparative shoppingtechniques at three retail outlets and choose the mostappropriate product and store. Justify choices by re-peating the process for the other two.
Selection of transportationInfluences on decision-making
Individual or family charac-teristics/needs
Lifestyle preferencesSocial considerations and fadsWork and hobby requirementsIntended type of useResources available
Purchasing considerationsSafety considerationsType of vehiclePurchase priceFinancing costsModel and accessoriesCondition of vehiclePotential maintenance and repair
costsOperating costs/fuel consumptionTitle transfer considerationsInsurance requirements, costs.
availability (2.6)Seller warranty, if anyAvailability of service and partsPotential for resale
Selection of housingInfluence on decision-making
Individual or family charac-teristics/needs
Lifestyle preferencesPotential mobilityTransportation considerations/
location
Availability of housingResources availableDemands of rental /purchase
agreementsPurchasing considerations
Type and style of houseSize and arrangement of spaceLocationPurchase priceInterior and exterior conditionStructural soundnessEquipment/fumiture needsEnvironmental considerationsMaintenance considerationsLegal aspects (see below)
Legal aspects of housingLeases
Rights and responsibilities oftenants
Rights and responsibilities oflandlords
Contracts (2.7)DeedsTitle searchLiensWarranties on new homes
Financial aspects of housingSources of home mortgage loans
Commercial banksSavings and loan associationsLife insurance companiesMortgage companiesPrivate contracts
6465
Government programsConsumer finance companies
Types of home mortgage loansConventional loansVeteran's loans (federal and state)Federal Housing Administration loans
Total costs of home ownershipClosing costsMonthly costs
TeeasInsurance (2.6)PrincipalInterestMaintenanceUtilities
Factors affecting costs of housingConsumer requirementsLand costsCosts of materialsCosts of laborcosts of interest and financingGovernment regulations and permits
Selection of food itemsInfluences on decision-making
Individual or family preferences andneeds
Cost, time and energy considerationsSocial, cultural and religious consid-
erationsEmotional stateAvailability of food
Health and special dietary consid-erations
Environmental considerationsPurchasing considerations
Form (dehydrated, fresh, frozen, etc)intended usePackagingLabelingNutritive valueCost comparisons
Price and qualityCost per servingUnit price
Convenience versus homemadeEating out versus eating at homeType of store and servicesPromotional techniques
Selection of clothing itemsInfluences on decision-making
Individual or family characteristicsand needs
Lifestyle preferencesSocial considerations and fadsPhysical and emotional consid-
erationsAvailability of resources
Purchasing considerationsTypeSize
Styling and fashionIntended useLabelingSafetyPurchase priceConstructionCare and upkeepType of store and services
Selection of durable goodsInfluences on decision-making
Individual or family characteristicsand needs
Lifestyle preferencesSocial considerations and fadsPhysical considerationsAvailability of resourcesIntended use
Purchasing considerationsBrandModel and featuresSizeEnergy efficiencyWarrantiesPurchase priceSafetyConstructionCare and upkeepType of store, service and repair policy
65
en
rights andresponsibilities
in the marketplace5.1 The U S Economic System
5.2 Rights and Responsibilities of Buyers and Sellers5.3 Fraudulent and Deceptive Practices
5.4 Sources of Consumer Assistance5.5 Consumer Legislation
rights and responsibilitiesin the marketplace
5.1 The US Economic System
FIRST LEVEL
STUDENTS WILL KNOW WHAT PART CONSUM-ERS AND OTHER GROUPS PLAY IN THE U SECONOMIC SYSTEM.
Describe the major types of economic systemsand their purposes.
List the characteristics of the economic systemin the United States.
Identify how consumers and other major groupsinteract in the U S economic system.
*STUDENTS WILL COMPREHEND HOW THE U SECONOMIC SYSTEM AFFECTS THE MARKET-PLACE.
Summarize how basic questions are addressedthrough the U S economy.
Explain various types of market structures.Give examples of problems with the economy.
Explain how consumers influence the market-place.
Show a film or discuss vr:rious economic systems. Listthe various types of systems on the board and identifyhow each addresses basic economic questions. Havestudents in groups draw a "slide rule" chart and placeeach system in sequence to depict how much controleach exerts on private property ownership, citizenparticipation in decision-making, and the rights ofthe individual as opposed to the social order. Discussdiagrams as a class.
View a film or read about the economic system in theUnited States; discuss the characteristics of differenttypes of markets in the U S economy and how the U S
economy as a whole addresses basic questions.
Have the class explore and discuss such concepts asprivate property, the profit motive, competition,prices and role of government, and how these factorsaffect the individual, business, labor interests, gov-ernment, etc.
List major groups participating in the U S economicsystem and identify the primary functions of each.Then, using a transparency illustrate the circularflow of goods and services in a "mixed" economy anddescribe the influence of each group on economicactivity, emphasizing the role of the consumer.
List problems whicl, exist in the U S economy. Askeach student to write a paragraph explaining two ofthese problems.
SECOND LEVEL
STUDENTS WILL BE ABLE TO APPLY ECONOM-IC PRINCIPLES TO MARKETPLACE DECISIONS.
Predict how our economy would address basiceconomic issues in specific situations.
Show how consumers are affected by variouseconomic conditions.
Predict how various types of economic systemsmeet consumers' needs and desires.
STUDENTS WILL BE ABLE TO ANALYZE THEEFFECTS OF VARIOUS ECONOMIES ON CON-SUMERS ANE OTHER GROUPS.
Illustrate how answers to basic economic issuesaffect the consumer.
Point out licw economic conditions at the inter-national level influence the supply of food and
68es.
energy resources in various societies.
Utilizing typical problem situations in the U S econo-my, such as unemployment, resource depletion, infla-tion, discuss how different responses to basic econom-ic issues might affect economic conditions. Then dis-cuss: how consumers are affected by various situa-tions, such as inflation, recession, depression, stagfla-tion; how consumers can protect themselves againstspecific economic developments; what roles consum-ers, business, labor and government should play to-ward providing economic stability; how consumers'needs and desires are met through the U S economy,and through other types of economic systems as well.
After reading current newspaper articles and busi-ness journals, ask students to discuss the UnitedStates' reliance on local. national and internationalconditions, especially in light of issues of currentinterest, such as energy, transportation, world foodsupply, urban renewal, etc.
THIRD LEVEL
STUDENTS WILL BE ABLE TO FORMULATECONCEPTS ON HOW THE U S ECONOMIC SYS-TEM AFFECTS VARIOUS GROUPS.
Explain how problems ;n the economy couldaffect the consumer.
Reorganize use of personal resources to reflecteconomic conditions.
STUDENTS WILL BE ABLE TO JUDGE HOW THEU S ECONOMIC SYSTEM INFLUENCES MAR-KETPLACE FUNCTIONS WORLDWIDE.
Summarize the effect of a specific action withinthe economy on various segments of the econo-my.Explain the influence of taxes, savings, invest-ments, and spending on the circular flow ofgoods and services.
In addressing basic economic issues, choices need tobe made. Following research, have students proposeanswers to the following questions:
How can national growth be balanced with en-vironmental concerns?
How can the consumer judge the long-rangeeconomic and social costs and benefits of govern-ment programs?
How can the economy and employment bestimulated while, at the same time, the inflationrate be lowered or held to a minimum?
How can competition be maintained as an inte-gral part of the U S economic system and theneeds of the less fortunate still be met?
As a follow-up, ask students how reorganization ofpersonal resources could have an affect in solvingthese issues or reflect conditions brought about bysuch issues.
As a class, review the circular flow of goods andservices studied earlier and, following further re-search, ask students to choose whether taxation, sav-ings, investments or spending has the greatest im-pact on the flow of goods and services. Ask students tosupport their choices by describing both the positiveand the negative impact in each situation.
Purposes and types of economicsystemsPurposesanswers basic questions
What is to be produced?How should this be produced?How is society to divide or ration the
total output?How will scarce resources be used?How flexible and adaptable is the
economy to change?Who is permitted to own which items
of wealth?What incentives are presented
to induce production?What determines individual bene-
fits realized from producing?Who controls distribution?
Types of economyCommand, Traditional, Mixed, Market
Characteristics of US EconomyTypeconsidered a mixed economy;
affected by government regulationMarkets
Types--product rnarit.ri (goods and
services); factor market (land.labor and capital)
StructurePure competiton
Large number buyers/sellersHomogeneous product
Pure monopolyOne firm produces productNo close product substitutes
Monopolistic competitionLarge number of sellersDifferentiated product
OligopolyFew sellers: interdependentHomogeneous or differ-
entiated productExpected outcomes
Efficient allocation of resourcesGoods/services for least costBuyers determine goods/services
Problems in the economyLack of informationResource ImmobilityLack of perfect competitionControversy of increasing role of
government intervention
69 ti9
Lack of economic stability due tounemployment, inflation,recession, and stagflation
Externalities
Major economic functions of selectedgroup*Consumers (individuals and families)
Provide laborConsume goods and servicesHelp direct the economy through
choices in the marketplaceBusiness
Provide opportunities for employmentGenerate profits
GovernmentCollect taxes (2 8)Modify the distribution of IncomeStrive to maintain full employmentEncourage price stabilitySupport economic grGwth/
developmentNegotiate with foreign producers
Labor unions (1.4)Represent interests of workers
Salary, benefits, workingconditions, lob security
5.2 Rights and Responsibilities of Buyers and Sellers
FIRST LEVEL
STUDENTS WILL KNOW THE RIGHTS AND RE-SPONSIBILITIES OF BOTH BUYERS AND SELL-ERS IN THE MARKETPLACE.
List the consumer's rights and responsibilitiesin the marketplace.
List the seller's rights and responsibilities in themarketplace.
STUDENTS WILL COMPREHEND HOW RIGHTSAND RESPONSIBILITIES INTERACT IN MAR-KETPLACE DECISIONS.
Give examples of consumer rights and relatedresponsibilities.
Explain seller rights and related respon-sibilities.
Using a transparency, list the rights of the "consumercitizen" as defined by Presidential Order. Discusswhy, historically and politically, these rights wereidentified. Have each student select one right, such asthe right to be heard, and write a short summary ofresponsibilities related to the consumer. Next, listand discuss the rights of the sellers; ask each studentto select one of these rights and write a brief descrip-tion of related responsibilities.
SECOND LEVEL
STUDENTS WILL BE ABLE TO APPLY KNOWL-EDGE OF THE MARKETPLACE TO VARIOUSSITUATIONS.
Predict the effects of responsible behavior onthe part of the consumer.
Predict the effects of responsible behavior onthe part of the seller,
*STUDENTS WILL BE ABLE TO EVALUATE CONSUMER AND SELLER BEHAVIOR IN THE MAI-K E'TPLACE,
Outline the consumer's rights and respon-sibilities in specific business transactions.
Outline the seller's rights and responsibilities in
specific business transactions.
As a class, prepare a checklist of the rights andresponsibilities of the consumer. Using various hy-pothetical case studies, determine which consumerrights may have been denied and what action theconsumer should take in order to obtain satisfactionin a responsible manner. Next, prepare a checklist ofthe rights and responsibilities of the seller. Using ahypothetical case study insolving shoplifting, deter-mine which seller rights may have been denied (forexample, the seller's right to make a profit) and whataction the seller should take in order to obtain satis-faction in a responsible manner. As a follow-up, askgroups of students to devise several skits depictingproblem marketplace transactions. Have class mem-bers discuss the problems and determine whether theconsumers, sellers, or both failed to accept responsi-bility in the situation. Outline specific actions whichmight have resolved each problem, and ask studentsto revise skits to depict the results of such actions.
THIRD LEVEL
STUDENTS WILL BE ABLE TO FORMULATEPLANS TO ASSURE CONSUMER AND SELLERINTERACTION IN MARKETPLACE TRANSAC-TIONS.
Compose a specific plan of action to resolve aproblem with a transaction in the marketplace.
Write a paper describing the effects of shoplift-ing on the consumer and on the seller.
STUDENTS WILL BE ABLE TO JUDGE WHENCONSUMERS AND SELLERS RECEIVE FAIRTREATMENT IN THE MARKETPLACE.
Justify an action on the part of the consumer inthe marketplace in terms of the rights and re-sponsibilities of the consumer,Justify an action on the part of the seller in themarketplace in terms of the rights and resgon-s;oilities of the seller.
As a class, discuss the impact of shoplifting andbrelkage on the cost of goods and services; ask stu-dent to do follow-up research on the cost of lost goods,protective services and equipment, and enforcementprocedures. Have students interview several mer-chants in the community to determine whether re-cent literature reflects the costs incurred due to shop-
70"o
lifting locally. As a follow-up, have students developa plan to inform other students about the situation,including assemblies, posters and articles in theschool newspaper.
Outline the rights and responsibilities of consumersand sellers as a basis for determining appropriate
action in specific situations. Using a variety of hy-pothetical case studies involving buyer and sellerconflicts, simulate each situation and have other stu-dents observe and justify the actions of either thebuyer or the seller through a review of establishedcriteria.
Responsibilities of coasuin- rsRelated to the right to choose
Develop sound buying habits (4.3)Encourage fair treatment by dealing
honestly and fairly with all businessestablishments
Refuse products which waste resour-ces, damage the environment orare unsafe
Related to the right to be informedBecome familiar with sources of
information on goods and services(4.3)
Understand warranties and perfor-mance claims (4.3)
Read and assimilate use and careinstructions before buying
Analyze advertisements and recentproduct developments (4.2)
Support enforcement of consumerprotection laws
Related to the right to safety
Examine product safety ratings andcare instructions
Use products for intended use andaccording to directions
Inform federal, state and local con-sumer ageri ies of potentially dan-gerous or unsafe products (5.3)
Relatea to the right to be heardUnderstand the consumer's role in the
US economy (5.1)Report desires, likes and dislikes, and
suggest product improvements todealers and manufacturers
Inform seller or manufacturer ofunsatisfactory merchandise orservice
Inform governmental, professional ortrade associations of unsatisfactorygoods and services (5.4)
Report fraudulent, deceptive andanticompetitive trade practices
Responsibilities of sellersRelated to the right to profit
Make the most efficient use ofresources
Consider environmental impact ofresource use
Provide goods and services whichmeet consumer demand
Related to the right to be informedInterpret changing consumer needs
and desiresInform consumers of safety consid-
erationsRelated to the right to fair treatment fromconsumers
Provide adequate serviceResolve reasonable consumer com-
plaints with speed and effi-ciency
Comply with all state and federalregulations (3.4, 5.5)
5.3 Fraudulent and Deceptive Practices
FIRST LEVEL
STUDENTS WILL KNOW FRAUDULENT ANDDECEPTIVE PRACTICES.
List significant types of fraudulent and decep-tive practices.
Identify trade practices which could involvefraudulent and deceptive practices.
STUDENTS WILL COMPREHEND HOW CON-SUMERS CAN AVOID FRAUDULENT AND DE-CEPTIVE PRACTICES.
Explain various types of fraudulent practices.
Explain methods consumers can use to protectthemselves in the marketplace.
Paraphrase warning signals which may identifyfraudulent practices.
Review those provisions of the Oregon ConsumerProtection Act which specify unlawful trade prac-tices.
Have students check the newspapers for reports ofconsumer fraud or deceptive practices and cliparticles to bring to class. Organize the clippingsunder headings as a bulletin board display; headingsmight include: short weight, repair swindles, charitygyps, health quackery, home improvement swindles,mail frauds, get-rich-quick schemes, work at homeschemes, chain letters.
Discuss potential fraudulent sales and how a consum-er might prove that advertised sale items have notbeen reduced in price. Next, simulate a situationwherein a merchant uses a "bait and switch" tech-nique. Discuss why this technique would be consid-ered "bait and switch" as opposed to "trading up," anddetermine how a consumer can determine the differ-ence between the two.
Discuss ways to identify fraudulent and deceptiveschemes. As a class, prepare guidelines for consumerself-protection. Then use student committees to re-search fraudulent and deceptive practices most pre-valent in the community.
SECOND LEVEL
*STUDENTS WILL BE ABLE TO APPLY KNOWL-
EDGE OF FRAUDULENT AND DECEPTIVEPRACTICES TO CONSUMER TRANSACTIONS.
Show how a fraudulent practice differs from asimilar approach that is a legitimate marketingtechnique.
Predict the economic impact of illegal practiceson both consumers and sellers.
STUDENTS WILL BE ABLE TO ANALYZE THEEFFECT OF FRAUDULENT AND DECEPTIVEPRACTICES ON CONSUMERS.
Distinguish between legal and illegal practicesin specific situations.
Select appropriate procedures for reportingillegal practices in various situations.
Illustrate the concept of the "pyramid" sales tech-nique by the multiplying effect that such a techniquecreates. (For example, by computing one person con-tacting six friends, and each of those friends eachfinding another six, and carrying the computationthrough nine steps, over ten million people are in-volved.) Discuss the amount of time required to "satu-rate" a market in a given situation. Estimate howmany people might make money from such a scheme,and how many might lose money
Discuss direct sales techniques which seem to be butare not legitimate marketing techniques. Read aboutor simulate specific cases of individuals who havebeen defrauded and decide what legal recourse theconsumer might have in each case, including whethersuch recourse includes a method for the consumer torecoup the loss. As a class, discuss the differencebetN.een individual legal recourse and problemswhich might involve a class action. Determine whattypes of problems might qualify for class action suitsand develop a checklist for evaluating situations asqualifying for class action proceedings.
Visit a small claims court or review available mate-rials to determine the type of action most commonlytaken and what effect increasing the maximumaward to $700 has had on handling consumer prob-lems.
THIRD LEVEL
STUDENTS WILL BE ABLE TO FORMULATEWAYS THAT CONSUMERS CAN PROTECT
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THEMSELVES FROM FRAUDULENT AND DE-CEPTIVE PRACTICES.
Create a hypothetical situation involving afraudulent or deceptive practice and devise ameans for resolving it.
Reorganize personal buying habits so as to avoidproblems in the marketplace.
STUDENTS WILL BE ABLE TO JUDGE MARKET-PLACE PRACTICES IN TERMS OF FRAUDULENTAND DECEPTIVE PRACTICES.
Appraise the potential impact of fraudulent anddeceptive practices.
Justify a specific marketplace practice in termsof rights for both the consumer and the seller.
Have students review personal buying practices,including the use and care of products, and determinewhat changes might help them to avoid problems inthe marketplace and gain more satisfaction frompurchases and expenditures. Based on iientifiedproblems or areas of weakness, ask each student to
develop and implement a plan of action to avoid orremedy any inadequacies and justify the planthrough documentation of improvements.
Have students research th,- kJt pyramid sales in aspecific situation in terms ,)f the dollar impact onconsumers as a whole. Diy;tics the prevalence ofpyramid sales schemes with local, county or stateenforcement personnel and estimate the overall im-pact on legitimate sales, and the economy in general.Based on the findings, support or refute the need forlegislation to prevent the growth of pyramid salesschemes and other illegal marketing practices.
Utilizing hypothetical case studies involving indebt-edness between two parties, have students explorethe outcome of resolving the problem in a variety ofways. Research should include investigation of suchrecourse as small claims court, collection agenciesand private legal action. Ask students to justify theselection of one approach over another and documentthe rationale behind the selection, including theeconomic and emotional ramifications of the differ-ent choices.
Significant typesBait and switch
An insincere offer by a merchant who"baits" the customer into the storewith an offer of a bargain, then"switches" the customer's interestto a product with higher profit
Should not be confused with honesttechnique of "trading up" (showingfeatures of an entire line)
Referral salesSeller promises a money rebate ordiscount if buyer provides names ofpotential buyers or other assistance;such promises illegal if
Payment Is not made as promisedPayment depends upon a sale,
presentation, or other eventsubsequent to the time of thebuyer's purchase
Fake salesProducts advertised as sale items
when prices not reducedLo-balling
Common practice in sales and repairbusinesses offering unusuallylow-priced goods or services
Item to be repaired is dismantled forone type of repair but additionalrepair needs are "discovered";consumer offered special rate foradditional repair service, and ifrefused, additional charges aremade for reassembly
A lien may be put on merchandise toassure payment for services
Pyramid sales and chain letters(multilevel sales)
Promotion promises big money, fast,and often with little effort
Promoters use a sophisticated versionof the old chain letter deviceemphasizing profits from sale ofdistribution rights, rather than aproduct
Market saturation occurs quicklyChance of making money or even
recouping investment is minimal (afew people at the top may makelarge amounts of money)
Pigeon dropSchemes to induce person (sucker) to
advance money in hope ofsharing in a large pool of money
Fra.jdulent Inspectors/representativeOdometer turn backFalse advertisingHealth and nutrition quackeryHome improvement swindles
Know when and where to seek furtherrecouree
File a claim with the appropriategovernmental agency (5.4)
Seek legal recourse when advisableUse the small claims courtFile individual suit
For violations of Oregon ConsumerProtection Act, buyer may beawarded
Attorney fees and costsMinimum damages of $20. ,Punitive damages
File a class actionMay be available when a number of
consumers have been injur&d ordeceived
Methods of protecting consumerIdentify deceptive or fraudulent practices:warning signals include claims whichimply that
Something can be obtained for freeThe consumer's home has been
selected especiallyHigh earnings can be realized with no
experienceAn advertising survey is being
madea selling technique Is beingused in lieu of normal advertising
A consumer must decide immediatelyor loose opportunity offered
Use safeguards when buyingShop at several storesAvoid impulse purchasing when pres-
sure techniques involvedRead and understand all contracts
before signing (2.7)Check total cost of item. including
delivery charges/finance feesMk for references from sales per-
sonnel if not representing an estab-lished business
Patronize businesses having a repu-tation for fair dealings
Check the validity of certifications andendorsemer ts
Understand warranties before buyingUse correct procedures in resolvingcomplaints
Know how/to whom to complain (5.4)Be sure complaint Is heard by the
person or company selling theproduct first
Be specific as to the nature of acorIplaint
Provide evidence of productdefault
Use a firm approach In registeringa complaint
Indicate type of adjustmentrequested
5.4 Sources of Consumer Assistance
FIRST LEVEL
STUDENTS WILL KNOW VARIOUS AGENCIESWHICH PROVIDE ASSISTANCE TO THE CON-SUMER.
Match federal or state agencies with activitiesor legislation for which they are responsible.
List services provided by several governmentagencies.
List services provided by several nongovern-mental agencies.
STUDENTS WILL COMPREHEND THE FUNC-TIONS AND SERVICES OF VARIOUS AGENCIESPROVIDING ASSISTANCE TO CONSUMERS.
Summarize consumer services provided by sev-eral government agencies.
Summarize consumer services provided by sev-eral nongovernmental agencies.
As a class, review literature and fact sheets fromvarious federal and state agencies to determine thetypes of assistance they provide to help the consumeravoid or resolve problems. Divide the class intogroups and ask each group to research a major feder-al or state agency, especially in terms cif recent agen-cy activities and services provided to the consumer.Next, as a class, list as many nongovernmental con-sumer agencies as students can identify; under eachlist the types of services, materials or activities whichthe agency provides to consumers. As a follow-up,invite representatives from a state or local consumergroup to class to discuss the purposes and currentprojects of their organization.
SECOND LEVEL
*STUDENTS WILL BE ABLE TO SOLVE CONSUM-ER PROBLEMS THROUGH USE OF VARIOUSSOURCES OF ASSISTANCE.
Prepare a list of common consumer complaintsand agencies which might help resolve suchcomplaints.
Show how the methods used egister com-plaints affect the resolutior complaints.
Show how to report complaints in specific situa-tions.
STUDENTS WILL BE ABLE TO ANALYZE THEROLE OF VARIOUS AGENCIES IN ASSISTINGTHE CONSUMER.
Identify how various government agencies as-sist consumers in specific situations.
Identify how various nongovernmental agenciesassist consumers in specific situations.
Review hypothetical case studies involving consumercomplaints or problems in the marketplace, and askstudents to %elect the most appropriate federal orstate agency or nongovernmental agency to assist theconsumer in each situation. Follow with a discussionon the importance of consumer reliability and accura-cy when registering complaints and the effect on useof tax revenues if complaints are not reported ade-quately or are misleading.
List the types of complaints which should be referredto the Consumer Protection Division. Using casestudies, ask students to practice writing letters ofcomplaint including all pertinent information neededfor investigation. Then investigate how to reportcomplaints to the Consumer Services Division. Re-view hypothetical case studies to determine whetheror not they involve legitimate complaints whichshould be reported. As a follow-up, conduct a classdebate on the question of how much consumer protec-tion should be provided by the government and whatresponsibilities should be left up to the consumer.
Invite a panel representing both government andnongovernmental agencies to class to describe thetypes of assistance provided by each.
THIRD LEVEL
STUDENTS WILL BE ABLE TO FORMULATEWAYS TO SEEK APPROPRIATE ASSISTANCEFOR CONSUMER PROBLEMS.
Write a letter to a specific government a gclicydPrumenting a problem with a specific productor service.
Design a form for registering a complaint witheither a government or nongovernmentalagency.
STUDENTS WILL BE ABLE TO JUDGE THE ADE-
74 "14
QUACY OF CONSUMER ASSISTANCE PRO-VIDED BY VARIOUS AGENCIES.
Appraise the services and functions of variousagencies.
Contrast the cost of consumer assistance pro-vided by various agencies to the potential bene-fits provided consumers.
Review various types of complaint forms, includingthe BBB form, mail order forms and samples fromseveral government agencies. Ask students to ana-lyze forms to determine the types of information
common to each; establish criteria for developingsimple but adequate complaint forms. Next, utilizingthe criteria established for complaint forms, ask stu-dents to determine how best to document the sameinformation in letter form.
Have students research the historical development ofvarious agencies, organizations and commissions,including functions, services provided and the costs,and ask students to use this information to documentan opinion as to the cost-effectiveness and need forthe organization or commission; defend continuation,reduction or elimination of the agency, organizationor commission.
Selected government agenciesFederal
Office for Consumer AffairsRefers complaints to appropriate
agencies or businessesLobbies for needed legislation
Food and Drug AdministrationEnforces laws to protect con-
sumer in production of foods.cosmetics/medical services
Handles consumer complaintsabout impurities in foods/drugs
Federal Trade CommissionSeeks to prevent false and mis-
leading advertisingSeeks to prevent deceptive
packaging/labeling of productsSeeks to prevent price-fixing and
other anti-competitive businesspractices
Department of AgricultureConsumer and Marketing Service
Inspects meat, poultry, and theirproducts to insure whole-someness and truthfullabeling
Develops official gradestandards and providesgrading services
Provides for food assistanceprograms to needy
Federal Extension ServiceMaterials/workshops on con-
sumer educationPostal Inspection Service
Investigates misuses of the mallsand warns against mail frauds
Protects consumers from illegalmaterials sent through the mail
Consumer Product Safety Commis-sion
Seeks to substantln:ly reduceinjuries assc 't..ted withconsumer produ' is used inaround the home, recreationaland institutional envirownents
Handles consumer complaintsabout product 'nzsrds
State and localConsumer Protection Division,Attorney General's Office, Department
of JusticeEstablished by 1971 LegislatureInvestigates consumer complaints
involving violations of Oregon'sUnlawful Trade Practices At
Initiates appropriate legal actionon behalf of the State of Oregonand the individual concerned
Has statewide jurisdiction inmatters involving deceptive tradepractices
Consumer Services Division, Depart-ment of Commerce
Established by 1971 LegislatureCoordinates consumer protection
servicesFurthers consumer educationConducts studies and researchHandles complaintsKeeps Governor and Legislature
informed of consumer mattersDepartment of Agriculture
Seeks to assure honest andinformative labeling, packagingand advertising of foods
Inspects and analyzes foods toassure safety, purity, andwholesomeness
Promotes accurate measurementof all goods sold to the consumerby weight, measure or volume
Controls application of agriculturalchemicals and pesticide residuein food
County District Attorney or ConsumerProtection Division, if available
Oregon State University and countyextension offices
Selected nongovernmental agenciesNational
American Council on Consumer In-terests
Publishes r,ewsletter about con-sumer Information, legislation,and governmental actionagainst fraudulent practicesand research
Promotes researr.h on consumerproducts, behavior andeducation
Buitinoss BureauP.ogIsters consumer complaints,
but has no legal ,authorityz,slets in self.regulation ofbusiness
Provirlos consumer informationmi rorials
Major Appliance Consumer ActionPanel (MACAP)
Consists of representatives of thehome appliance industry,including the Association ofHome Appliance Manufacturers.the Gas Appliance Manu-facturers Association, and theAmerican Retail Federation
Provides assistance to resolve andminimize consumer protlemswith home appliances
Consumers Union of US, IncTests quality of productsGives consumers advice and
counsel of tested products in apublication, Consumer Reports,and other brochures
Consumers Fc,,, ratiln of AmericaPromote: .c, r.ur, ,.;rotectlrin
through.Serves a: a with state
Willi/Hoe in proo, ng consumerprrti,..patio;, anr: ction
Joint C il for F.cw.,,nic EducationPron,...;as econnii c aspects of
education materialsdev.lopment ra earch, andte, traininy .ograms
Direct WV Advc$Cs' Association,Inc
Handles Jer complaintsTrade t. .ation for major mall
order ,rnpanlesAssists In removing consumer's
name non, thei, member'smailing list upon request
',,ate and localOregon Conwimer League
Promotes consumer legislation,research, and education
Publishes OCL Newsletter 6.membership
Refers consumer complaints ar,:iInquiries
Provides speakers to organizationsand schools
Oregon Student Public InterestResearch Group (OSPIRG)Promotes research'involve-
ment of students Ir, topicsof consumer Interest
OtherState Bar AssociationLegal aid societies
5.5 Consumer Legislation
FIRST LEVEL
STUDENT WILL KNOW HOW CONSUMERLEGISLATION PROTECTS THE CONSUMER.
Match provisions of federal laws with the typesof protection provided.
Match provisions of state laws with the types ofprotection provided.
STUDENTS WILL COMPREHEND THE IMPACTOF CONSUMER LEGISLATION.
Explain the major provisions of Oregon's Con-sumer Protection Act.
Summarize the major provisions of several fed-eral laws enacted to protect consumers.
Discuss with students significant federal and stateconsumer legislation. Assign student groups to re-search particular consumer topics, such as credit pro-tection and fcr,d safety; have students develop achrotvi;ogict.l list of federal and state legislationunder each topic area. Then, view a filmstrip aboutfederal and state consumer legislation; identlfy theagencies (5.4) responsible for enforcing specific lawsor regulations in the filmstrip. As a follow-up, invitea guest speaker from one of these agencies to class todiscuss tho development of legislation through a par-ticular agency, the protection provided to the consum-er, and the rationale fol passing such legislation.
Review the provisions of the Oregon Consumer Pro-tection Act and determine the types of protectionprovided. Discuss whether this act primarily protectsindividual consumers or consumers collectively.
Ask a government or industry representatiy to classto discuss the distinctions among an act, staute andregulation, and explain how each is passed or enact-ed. Next, invite a spokesperson from a consumerorganization or special interest group to class to dis-cuss how they promote the enactment of consumerlegislation. If appropriate, have them describe pro-jected new legislation which they intend to promote.
SECOND LEVEL
*STUDENTS WILL BE ABLE TO APPLY KNOWL-EDGE OF CONSUMER LEGISLATION TO VARI-OUS SITUATI. )NS.
Predict the impact of specific legislation.
Show how consumers can a, -,.pt. responsibilitywith regard to legislation anc.1 unfair businesspractices.
STUDENTS WILL BE ABLE TO ANALYZEMARKETPLACE PRACTICES U TERMS OF CUR-RENT CONSUMER LEGISLA'T'ION.
Relate the need for specii. legislation to mar-ketplace practices.
Relate how consumers are protected bytion in specific situations
Ask each student to seleci ri review a spec', is pieceof federal or state consumer legislation :,nd deter-mine what effects such legislation :..as ;,br! .onsum-er, producers, business an,' govt, einem interests.Divide the class into groups and each groupoutline the consumer's role in prote, t'ag :ielf inter-ests. Determine what type of legislation they alwaysbe essential due to the consumer's inability to haveaccess to adequate information. Not, have studentsinvestigate how consumer:3 are protected against thesale of goods and services whir'h might endanger lifeor health. Have studi,aut di cuss which safety mea-sures seem adequat;;. what, further legislation seemsnecessary and how additional legislation wouldbe accomplished. The:, divide the class into groups toinvestigate and report: on specific legislation, includ-ing measures for enforcement.
List various licensing requirements according totypes of services lemi discuss how these protect theconsumer. Ask tit class to identify current statelicensing regulations. Have individual students in-vestigate licensing requirements pertaining to anoccupation of their choice and report how such re-quirements protect tb- consumer as well as businessand industry interests.
THIRD LEVEL
STUDENTS WILL BE ABLE TO PROPOSE WAYSCONSUMER LEGISLATION AFFECTS BOTHCONSUMERS AND SELLERS.
Summarize the economic impact of consumerlegislation on both consumers and ,'oilers.
Explain the possible effects of a specific law onthe peumer.
76
STUDENTS WILL BE ABLE TO JUDGE THEADEQUACY OF SPECIFIC CONSUMER LEGISLA-TION.
Appraise the effectiveness of a specific federalor state law in protecting the consumer.Support the decision to increase or decrease con-sumer legislation in specific situations.
Invite a panel representing industry and governmentto class to discuss the costs of enacting and enforcingspecific legislation from their point of view. Followwith a discussion on whether consumers should beprotected by legislation when it is costly.
Based on previous study, ask students to research the
background and development of a significant federalor state law. Use research journals and briefs of legaldecisions to determine the effects on consumers.Next, as a class compile research data and havestudents debate whether part or all of the legislationshould be expanded or eliminated; justify positionsbased oh cost-effectiveness and potential for provid-ing consumer protection that cannot be achievedthreo.rh oi her channels.
ni..vspaper clippings regarding both project-ed legislation and newly enacted legislation.Have students discuss the types of legislation whichmight be considered at a later date and the possiblereactions of various special interest groups to suchlegislation.
Significant federal consumerlegislation1872Mail Fraud Act of 1872
Makes it a federal crime to defraudthrough use of the mail
1914Federal Trade Commission ActSets up thn Federal Trade Commis-
sion. which among other respon-sibilities is concerned with"unfair methods of competition"such as deceptive advertising
1938Federal Food, Drug, and CosmeticAct of 1938Strengthens the Food and Drug Act of
1908 by extending coverageto cosmetics and devices
Requires predistribution clearance ofsafety on new drugs
Provides for tolerance for unavoidableor required poisonous sub-stances
Authorizes standards of identity.quality, and fill for containers offoods
1939Wool Prroiucts Labeling ActProvides for proper labeling of the
kind and percentages of eachtype of wool
1953Flammable Fabrics ActProhibits the shipment in interstate
commerce of any wearing apparelor material which could be ignitedeasily
1982Kefauver-Harris DrugAmendmentsRequires drug manufacturers to file all
new drugs with FDARequires pretesting of drugs for safety
and efficacyRequires labeling of all drugs by
generic name1x85 Fair Packaging and Labeling Act
("Truth-in-Packaging")Regulates the packaging and labeling
of consumer goods'',ovides that voluntary uniform
' ackaging standards beestablished by industry
1968National Traffic and Motor VehicleSafety ActAuthorizes the Department of Trans-
portation to establish compulsorysafety standards for new andused tires and automobilec
1966Child Safety ActStrengthens the Hazardous Sub-
stances Labeling Act of 1960Prevents the marketing of potentially
harmful toysPermits the FDA to remove inherently
dangerous products from themarket
1966Cigarette Labeling ActRequires cigarette manufacturers to
label cigarettes: "Caution: cigarettesmoking may be hazardous to yourhealth."
1968Consumer Credit Protection Act("Truth-in-Lending")Requires full disclosure of annual
interest rates and other financecharges on consumer loans andcredit transactions (3.4)
1969Child Protection and Toy SafetyAct of 1989Amends Federal Hazardous Sub-
stances Act to protect childrenfrom toys and other articles,intended for use by children, whichare hazardous due to the presenceof electrical. mechanical, orthermal hazards
1970Fair Credit Reporting ActRegulates credit information reporting
and use1970Poison Prevention Packaging Act
Authorizes Identification of potentiallylethal substances that should besold in child resistant packages andsetting of standards for thepackaging
1972Care Labeling ActRequires that certain articlec of
wearing apparel be permanentlylabeled with laundering and drycleaning care Instruction
1972Consumer Product Safety ActCreates new independent federal
regulating agencyConsumerProduct Safety Commission (5.4)
Assumes authority for Federal, Hazardous Substance Act, Poison
Prevention Packaging Act,Flammable Fabrics Act, and theRefrigerator Door Safety Act
1974Fair Credit Billing ActEstablishes procedures for correcting
billing mistakes in open-end credittransactions (3.4)
1974Equal Credit Opportunity ActProhibits discrimination on such basis
as sex, marital status, age or race(3.4)
1975Magnuson-Moss Warranty Im-provement ActSpecifies minimum disclosures for
written warranties1977Fair Debt Collection Practices Act
Amends Consumer Credit ProtectionAct
Provides that debt collection practicesbe fair and not violate theconsumer's rights
Applies only to personal, family orhousehold transactions and toindependent third parties collectingdebts (3.4)
Significant state consumer legislation1985 Oregon Consumer Protection Act
Protects consumers from "fast buck"sales personnel who phone or callat door
1971Consumer Protection ActDefines "consumer paper"Alters the Holder In Due Course Policy
to make lending Institutions liableon retail installment contracts upto the amount owing on the contract
Changes the deficiency judgmentpolicy in two ways if amount owingat time of default Is less than$1,250, seller may not obtain adeficiency judgment If there is arepossession or voluntarysurrender. If amount owing at timeof default is $1.250 or more, In orderto obtain a deficiency Judgment, theseller must bring default actionwithin 90 days of repossession
Seller must credit the fair market valueof the Item at the time of repos-session
Gives a buyer the right to cancel homesolicitation sales up to three daysafter purchase (does not apply tocash or check purchases in amountof $50 or less)
Prohibits misrepresentations ordeception in consumer trans-actions by defining specifiedunlawful trade practices, includingRepresenting that goods and
services have sponsorship.approval, characteristics.ingredients, uses, benefits orqualities that they do not have,or that a person has a sponsor-ship, approval, status, qualifi-cation, affiliation, or connectionthat the person does nothave "bait and switch"advertising
Other false advertising concerningprices or quantities
Misrepresentations about theavailability of credit or the natureof the transaction or obliga-tion incurred
Servicing or dismantling ap-pliances, machinery, or amechanical device when notauthorized by the owner
Failure of telephone or door-to-door solicitor to identifyself or state the purpose of thecontact within 30 seconds
Certain aspects of referral sales(5.3)
Promising to deliver goods orservices within a certain periodof time with intent not to deliverthem as promised
1973--t...onsumer Protection Act (Amend-ments)Extends application to real estate
transactions and to transactionsinvolving goods, services, andreal estate purchased for resale aswell as personal use
Defines and prohibits "pyramid clubs"Applies to all multilevel sales
programs which require an invest-
ment by the buyer and offer thebuyer an opportunity to sell orassist in selling positions in thecompany to other persons whothen can also sell or assist inselling positions
1973Class ActionsAuthorizes class actions in state
courts when there are com-mon questions of law or fact and theclass is so numerous that joinderof all the members is impracticable
1973Open Dating LawAmends Oregon Food LawsRequires all perishable foods with a
shelf life of 30 days or less whichare sold in Oregon to be open dated
Excludes produce from the listing ofperishable foods
1973Residential Landlord-Tenant ActComprehensive regulation of landlord
and tenant responsibilities andrights
1975Generic Drug Substitution LawAllows pharmacy to substitute a
prescribed brand name drug witha generic drug unless purchaseror physician states otherwise
1975Unit PricingRequired of stores selling $1.5 million
per location per yearExempts fresh produceEstablishes price per measure, such
as pound1979Small Claims Court
Increases Small Claims Court limitfrom $500 to $700
Other regulations and/or licensingRequires licensing (and in some
instances bonding) of specifieddealers, agencies, companiesand repair and service personnel,such as: motor vehicle dealers,pawnbrokers, home builders, smallloan companies, employmentagencies, credit unions, collectionagencies, insurance companies,and home improvement agencies
Personal Finance Education Guide
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School administrator publication (graphic art, style, type, etc.)?Other
ExcellentWould you recommend this publication to a colleague? Good
FairYes, without reservations _ Poor
--. Yes, with reservationsNo
_ Other
When this publication is revised, what changes would you like to see made?
Additional comments. (Attach a sheet if you wish.)
Thanks!
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BUSINESS REPLY MAILFIRST CLASS PERMIT NO. MS, SALEM, OREGON
POSTAGE WILL BE PAID BY ADDRESSEE
Publications SectionOregon Department of EducationSalem, Oregon 97310
No PostageNecessaryIf Mailed
in theUnited States
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