Central Washington University
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1982
A Family Budget Simulation for Use in Secondary
Level Consumer Economics Class
Robert James Barrett
Central Washington University
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A FAMILY BUDGET S IMULAT ION FOR USE IN SECONDARY
LEVEL CONSUMER EC ONOMIC S CLA S S
A Pro j ec t Report
P r e s ented to
The Gradua t e Faculty
C entral Washington Univers ity
DATE DUE
MAY 2
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l
of t
f
D•mco, Inc. 38 293
A FAMILY BUDGET S I}filLAT ION FOR USE IN SECONDARY
LEVEL CONSUMER ECONOMICS CLASS
by
Robert Jame s Barre t t
June , 1 9 8 2
A family budget s imulation was des igned and f iel d­
tes te d u s ing pre t e s t and p o s tt e s t comparisons of fif ty- s ix
s tudents and p o s t t e s t only comp ar i s ions of one hundr ed
s ixty- three s tuden t s to measure s tudent achievemen t .
The
r e s ul t s showed sub s tantial pret e s t to p o s t t e s t gains but no
s ignificant differen c e s in p o s t t e s t only averag e s b e tween
s tudents u s ing the s imulation and tho s e not u s ing the
s imulation .
Recommendations for improving the des ign and
app l icat ion of the s imulation are discus s e d .
ii
TABLE OF CONTENTS
Page
Chap ter
1.
2.
BACKGROUND OF THE STUDY .
1
S tatement o f the Prob l em
5
Purp o s e .
.
5
Defin ition o f Terms .
5
Organization of the Remainder of the Pap e r
6
REVIEW OF THE L ITERATURE .
7
.
.
S tudie s Indi cating S imul at ions Have P o s i t ive
Effect on Cognitive Development . . . . .
S tudies Indicating S imul at ions Have P o s it ive
. . . . . .
Effect on Attitudes . . .
.
.
.
S tudies Ind icat ing No S ign ificant Difference
in Cognit ive Deve l opment B e tween S imulation
and Convent ional Techniques . . . . . .
3.
.
.
8
8
9
Conclus ions From the Review of L i terature .
10
PROCEDURES OF THE STUDY .
12
De s ign ing the S imulat ion
12
Family description .
.
12
Activity a s s ignmen t s .
12
Concep t s .
.
13
Pre t e s t and p o s tte s t .
13
N e t worth worksheet .
14
Family goal s and budget attack p l an
14
Introducing the s imulat ion .
15
Conducting the simulation .
15
D e s crip tion o f the P opulat ion .
17
iii
TABLE OF CONTENTS ( c ontinued)
Chap ter
Page
Methods of Comparison .
17
4.
RESULTS .
. .
18
5.
SUMMARY , CONCLU S IONS , AND RECOMMENDATION S .
21
B a ckground
21
Procedure s
21
Result s .
21
.
.
.
.
.
.
C onclusion s .
22
Recommenda t i on s .
22
· B IBLIOGRAPHY .
26
APPENDIX .
30
.
.
iv
Chap ter 1 .
BACKGROUND OF THE STUDY
The backgr ound of the s tudy wi l l s eek to f i r s t
des cribe the n e e d f o r economic educ ation , s econd to pre s en t
the need for the u s e o f s imul ations a s a teaching devi c e ,
and third to pre s ent the n e e d f o r thi s proj ec t .
In the Uni t e d States , the ul t imate respon s ib i l i ty
for p o l icy dec i s ion s ,
the citizen s .
including economic p o l ic y , r e s t s with
"The future qual i t y of such dec i s ions will
de t ermine whether this nation and the world wi. 1 1 progres s ,
stagnat e , or r etrogr e s s economically . "
p . llf )
( F rankel , 1 9 6 5 ,
Frankel s ta tes that it is a nec e s s ity and an obli­
gat ion for cit izens to gain a b a s ic under s t anding of the
operation of the American economy .
He b e l i eves ,
"the
funct ion o f economic education is to a s s i s t our c i tizens to
make tho s e ec onomic dec i s ions that f o s t er b e s t the at tain­
ment of the American goal s of ec onomic growth , s tab il ity ,
s e curity , fre edom and j us t ic e . "
(p. 15)
It app ears that
economic education is not now adequately ful f i l l ing that
funct ion .
"The sad s tate of economic knowl edge in this country
has been s o well documented that it can hardly be dispute d . "
( C obb s , 1 9 7 6 , p .
7)
Surveys show that the public thinks
that manufac turers net 28 p ercent on sales , that teenagers
1
. 2
think o-vmers get a larger share of each 'do l lar than the
worker s , and that c o l l ege frosh do not know what inflation
does to b ondho l der s .
( C obb s )
The news media, ..TV and radio ,
have apparently not contributed grea t l y to economic under ­
s tanding .
The school s have recently direc ted their atten ­
tion to this fel t n e ed for economic unders tanding .
S ign if­
icant gains have b een made in the las t twelve year s .
The
re sul t s of a national survey of ec onomic education conduc­
ted by Yankalovich ,
Skel l y and Wh ite ,
Inc . and copyrighted
by Phi l l ip s Petroleum Company found that some form of
ec onomic e duc ation is much more widely ava ilable in b o th
j un ior and senior high s choo l s than it was twelve years ago .
The survey r eported that 6 7 p er c ent of j unior high s chool
economi c s teachers said that economic s is availab l e in
s ixth or s eventh grades in their s chool s and 54 p ercent of
s enior high teachers report that economics i s introduced in
ninth and tenth grade s .
Of teachers surveyed , 48 p ercent
reported that ec onomi c s is a required sub j ect in their
s chool , and another 3 9 p ercent rep orted that economi c s
i s ava il ab l e as an e lec tive to all who wish to take i t .
In
1 9 7 9 , over thirty s t a t e s required the.teaching of consumer
concep t s and in another s ix states the l e g i s l ature or state
education authorities have made statemen t s urging the
t eaching of con sumer education .
1979 )
( Master Curriculum Guide,
The state of Washington l i s t s career educ at ion, con­
sumer education and economic education as thr ee of ten areas
which mu s t b e included in areas of s tudy ava ilab l e to
3
student s .
( WAC-1 8 0 - 5 6 - 0 2 6 )
A survey of students , parents
and t eachers in O thello to det ermine which areas of study
were considered important by each group identif ied knowledge of money management and career opportunit ies as among
the most imp ortant areas of study for high schoo l students .
A one trimester , or twelve week , course ent i t l e d Consumer
Economics is a graduation requirement of Othello High Schoo l .
Economic e ducation is an identified n e ed in the Othel l o
School D istr i c t .
Assuming that economic education is an identif ied
need, why use games or simulations to help teach economics?
Most educators bel ieve that education becomes more
eff e c t ive when students are motivate d .
One o f the advan-
tages argued for the use o f games and simulations in the
classroom is that they increase student mo tivation .
The
advantage of simulat ion is that the partic ipant is part o f
the situa tion , and i s ab l e to see the whol e o f the situat ion .
Participation should build a higher degree of motivat ion
and give purpose to learning .
The simulat ion takes learning
out of the area of abstraction and makes i t a partic ipatory
skill; in social studies the use of simulat ion provi des a
l aboratory exp erience similar to practical work that is
carr ied out in science l ab s .
( Tansey & Vnwim , 1 9 6 4 )
Tansey and Unwin summar ized the advantages of simulat ion:
1.
2.
3.
4;
It
It
to
It
It
mo t ivates partic ipants .
uses t echniques of co- operat ion as opposed
comp et i t ion .
enab l es teaching for long-range future .
inj ects real ism and rel evance into cl assroom .
4
5.
6.
7.
8.
9.
10 .
It enab l es comp l ex problems to be made simp le r
and so to b e more easily understo o d .
I t changes social c onditions under which learning
takes p lace .
It is structured presentat ion of informat ion .
I t can b e used as a selective procedur e .
I t can b e teacher prepared and leaves control
in teacher hands .
It all ows decision-making without censure . ( p . 2 9 )
Boocock and Coleman ( 1 9 6 6 ) see the use of simul ation as a
factor in overcoming three maj or defe c ts in American secondary e ducation .
These three defects include the cl aim that
se condary schools teach for the long-range futur e ,
that the
curriculum is enforced, not voluntary , and that the teacher
has a dual r o l e as teacher and j udge .
Tansey and Unwin
argue that simulat ion allows the future to b e br ought into
the chil d's present by allowing him to p l ay roles he will
have to p l ay or b e aware of as an adul t .
Proponents of
simulat ion suggest that by abstracting phenomena from the
real world, students are provided with a more simp l if ied
and comprehensib l e universe .
Students gain the oppor tunity
to apply and exp eriment with knowledge gained through o ther
exp eriences and wh ile participating in the simul ation , students gain insight and understanding into the behavioral
aspect of others .
( Fe l dbaum , Buckley & Levit t , 1 9 7 6 )
Addit ional a dvan tages presented for the use o f simula tion
include the motivational advantages of interest and exc itement in learning , the removal of student-teacher p olarizat ion
and the app l ication of simulat ion as a universal b ehavioral
mode .
( T aylor & Wal f o r d , 1 9 7 2 )
Taylor and Wa lford state
that gains r e lated to -relevance and le arning from the use
5
of simulations include lean1ing· at diverse leve l s , gaining
experience in dec ision-making , comin g to grips with t ime in
a dynamic framewo rk and bridging the gap to re.ality .
The
use of games and simulat ions involves certain condit ions
that some educators feel are essent ial for l earning.
F e l dbaum, Budkl ey , and Levi t t l ist these conditions pro ­
vided by simulat ions as active invo lvement , peer contac t ,
interaction between student and teachers , trial and error
processes and integration of instruc t ional material with
relevan t situations .
. Statement of the Prob l em
Whil e teaching Corisumer Economics , the writer
became aware that a l though many simulat ions existed to aid
in the training o f ec onomics , none could b e found that were
real istic models for a family budget simulat ion for residents
of Othel l o , Washington.
Purpose
The purpose of this proj ect was to design and field
test a family budget simulat ion for use in an e l eventh grade
Consumer Economic cl assroom in Othel l o High School .
Definition of Terms
S imulation.
An operating imitat ion of a real p ro­
c ess; ref ers to a game-like setting in which par ticipants
choose , imp l ement those cho ices , and receive consequences
for those choices in an effort · to ac�ieve sp ecific obj ectives .
6
Game .
A contest played according to rules and
decided by skil l , strength or apparent luck , usual ly
involving a winner .
Model .
A representat ion , actual or theor etical , of
the structure or dynamics of a thing or process .
Rol e-play.
To accept a new identity .
Family budget .
The product of a family ' s efforts
to manage their resources to obtain their needs and wants .
C onsumer economics class .
A c lass which studies
the a ctivities of consumers to include money management and
credit .
Organizat ion of the Remainder of the Paper
Chapter 2 wil l be devo ted to a review of the liter­
ature concerning the effectiveness of simulation as a
t eaching technique .
Chapter 3 will b e a description of the
procedures used in designing and field-testing this proj ec t .
Chapter 4 will present informa tion resul t ing from the field­
testing- experience .
Chapter 5 will provide a summary , con ­
clusion and a numb er of recommenda tions .
Chap ter 2
REVIEW OF THE LITERATURE
Research studies conc erning the effec tiveness of
simulat ions as teaching techniques report inconc lusive
resul ts .
L ivingston ( 1 9 7 9 ) reports simul ations are helpful
in present ing the abstract in a more concrete method .
Ryan
( 1 9 6 8 ) concludes that simulations are effective ·methods to
increase transfer o f l e arning a c t ivities .
Other studies
reported positive relationship between the use of simula­
( C ratly & Martin , 1 9 7 0 ; E l l is &
tions and cognitive gains .
Glenn , 1 9 7 7 ; S t o l tman , 1 9 7 4 )
Studies indicate that the use
of simulations and g ames increases students' interest and
this motivation can b e helpful in deve loping desired a t t i ­
tudes .
(Anderson , 1 9 7 0 ; Boocock & C o l eman , 1 9 6 6; Heinkel ,
1 9 7 0 ; L ivingston , 1 9 7 1 ; Wentworth & Lewis,
1980 )
1 9 7 3 ; Will iams,
Many studies indicate no significant cognit ive gains
by use o f games o r simulations .
1 9 6 6; Garvey , 1 9 6 8; He inke l ,
(Anderson , 1 9 7 0 ; Cherryho lmes ,
1 9 7 0 ; Jackson , 1 9 7 9 ; Livingston ,
1 9 7 1; Marston , Lyon & Knight , 1 9 7 2 ; Saafrain & Man de l ine ,
1 9 8 0 ; Wentworth & Lewis , 1 9 7 3 )
Wentworth and Lewis ( 1 9 7 5 )
reported negative results in cognit ive gains in a j unior
col lege economics c l ass .
The mixed nature of results has
lead some reviewers of the research to suggest that gener­
al izations are not warran t e d .
� Bagley , 1 9 7 4 ; Henderson &
7
8
Gaine s , 1 9 7 1 ; Tansey & Unwin , 1'9 6 4 )
Studies Indicat ing S imulat ions Have Positive
Effect on C ognit ive Devel opment
A study c onduc ted by Eugene Baker , and described in
a review of research evaluating games and simulat ions b y
J ean B e l ch ( 1 9 7 4 , p . 3 1 1 ) , reports that students using a
C ivil War simulat ion obtained significantly more l earning
and r etention than students using a tradit ional approach .
Research derived from the Early California Gold Min ing Camp
S imulation suggests that cognitive learning and app l icat ion
of basic economic concepts is significantly in favor of
students who particip ated in simu.lation as opposed to those
.
who were told meanings of the concepts wi thout a simulation
ac tivity .
( S t o l tman , 1 9 7 4 )
El l i s and Glen ( 1 9 7 7 ) found that
students using Marke t , C onsumer and Credit Game simulations
had significantly higher posttest scores than did students
in either a discussi on-workb ook gr oup or a control gr oup .
( Cratly and Mart in ( 1 9 7 0 ) reports that low achievers using
l earning games had significantly greater alphabet l e arning ,
self-control , and serial memory and motor ab i l ity than did
three other control group s .
Carlson ( 1 9 6 7 ) reports that
slow l earners are among the chief b eneficiaries of games in
the cl assroom .
S tudies Indicat ing S imulations Have Positive
Effect on Att itudes
Research proj e c ts into effect of simulation and
games indicate that they are p o t entially very p owerful
instruct ional vehi c l e s .
( Twelker , 1 9 7 7 )
Chartier ( 19 7 2 )
suggests that simulation games generate more interest in
subj ect matter than do more conventional c lassroom ac tivi ties .
When asked to rank twenty- three activit ies used in
the Amer ican High School Geography Proj ec t , the three
simulations were ranked first , second and fifth by the
teachers on both interest and sense or worth; students
ranked the simulat ions first , second and fourth in b o th
interest and sense o f worth .
( Tay lor & Wadford,
1972)
Reid ( 1 9 8 0 ) concludes that the strength of simulations l i es
in achieving aff e c t ive obj ec tives .
Wentwo rth and Lewis
( 1 9 7 3 ) report that a review of f i f ty studies on the effect iveness of games and s imulations il lustrates that games
and simulat ions have a positive-influence in encouraging
students to b ecome more act ively invo lved in the l earning
process .
Anderson ( 1 9 7 0 ) found that simulat ion games are
b e t ter ab l e to p r o duce behavioral changes than tradit ional
c l assroom te chniques .
While noting the almost universal
observation of increased mo t ivation and interest when students use games or simulat ions , Will iams ( 1 9 8 0 ) suggests
11
•
•
•
a host of studies prove that educ ational games can
change a t t itudes . " ( p . 1 7 9 )
S tudies Indicating N o S ign ificant Dif ferences in
C ognitive Devel opment B e tween S imulat ion and
C onventional Techniques
Markston , Lyon and Knight ( 1 9 7 2 ) found no signifi cant differences in student achievement between a control
10
gr oup an9- an exp erimental group u s ing a nat ional inc ome
s imulat ion mo de l .
Cherryholmes ( 1 9 6 6 ) concludes . only that
s tudents enj oyed games and s imulations more than c onventional c l a s s room a ctivi t ie s .
Wentworth and Lewis ( 1 9 7 3 )
report that a review of the literature indica t e s s imulat ions
have l i t t l e imp a ct on cognitive learning when compared with
other teaching techniques.
Anderson ( 1 9 7 0 ) foun d no s ignifi-
cant differenc e s b e tween s imulation and conven tional
approaches with respect to factual l earning .
Garvey ( 1 9 6 8 )
rep orts s imul a tion g aming through International S imulation
resulted in no s ignifican t difference s in testing with
control and exper imental simul ation-p laying group s.
S zafran
and Mando lini ( 1 9 8 0 ) used a multip le-choice c l a s sroom t e s t
to find no incr ea s e in cognitive knowledge b y use o f s imulat ion.
Conc lus ions From the Review of L iterature
Conclusion s regarding the effec tivene s s of games and
s imul ations ba s e d on p a s t res earch s tudie s mus t be tentative .
Although s ome s tudies indicated s imul at ions were effec t ive
in achieving cogn i t ive gains , more s tu � ies ·appear to indic at e
that s imula tions a r e no more effective in achieving measured
cognit ive ski l l s than were more tradit ional teaching metho ds.
S tudies do indicate that s imul at ions are us eful in increas ing
s tudent motivation and intere s t and there is some evidence
that they may be u s e ful in deve l op ing des. i red attitudes.
Ob servers agree that games do teach , but what they t each
and how they teach are yet to be prec i s e �y measured.
11
1 9 7 0, p . 1 5 0 )
(Go rdon ,
Game designers have deve loped a
technology b efore the theore tical science nec essary t o
measure what the games do accorapl ish has b e en develop ed.
_ _
Gordon suggest that the lack of sound evaluation for educat ional games is due t o :
l
.·
2.
3.
relative newness of t ea ching . techniques prec ludes
a systemat i c evaluat ive pro cedur e .
inherent problem of evaluating any technique in
education caused by lack of experimental control s .
lack o f measuring instrument. ( pp . 1 5 0 -1 5 1 )
Most comp arative studies used either a standardized
test such as the Test on Consumer Comp e t ence from the Joint
C ouncil on Economic Education or a teacher-made obj ec tive
test to measure what the simul ation - p laying students learned.
It is entirely p ossib l e that this form of testing is not an
approp riate measurement of the learning that took p l ace
during the simul ation .
Chap_ t er 3
PROCEDURES OF THE STUDY
The procedure used in thi s proj ect divides into
three different phas e s .
The s imulat ion wa s first des igned,
then introduced into the c l a s s room and then conduc ted in the
c l a s sroom.
Des igning the S imulat ion
Family descrip t ions .
Tel ephone and personal inter-,
views were used to create descripti ons of real p eop le an d
their o ccupa t ions and income .
Thes e individual s were then
randomly matched to produce marr ied coup l e s so a s to create
a family descript ion in which the true identity of the p e r ­
son upon whom the s imulation was b a s e d was disguis ed .
Married coup l e s were then given famil ies depending upon
their age to further disguis e their identity and to increase
the numb er of c l a s sroom p ar t i c ipants by providing more role­
p l ay ing opportun itie s .
S ix r o l e s were des igned for s ingle
peop l e, with two of the s e s ingl e s engaged to each o ther at
the beginning of the s imulation .
Activity a s s ignment s .
The family budget was
divided into typ ical categories of exp ens e s such as food,
tran sp ortation, hous ing ,
recreat ion .
insurance, entertainment and
For each of th ese categories, an ac t ivity
12
13
assignment was wr i t t en with the exp e c ta t i on that by do ing
the activity assignment the student r o le-player would gain
the information necessary to j ustify" an expense for a
sp ecific budget ca tegory .
For examp l e, b efore deciding how
much money to budget for food for their family, a student
had to comp l e te the food menu activity assignmen t .
This
assignment asked students to p l an a menu for their family
for one week , to determine the amounts o f each food item
needed to provide servings so p lanne d , and to price each
item on the menu and then total the prices to arr ive at a
cost o f food p er week for their family .
This cost of food
p er week coul d be used to compute food costs P.er month as
required by the simulat ion .
Concepti!. .
Key economic concep ts that the simulation
was designed to help teach were wr itten as aids in the crea­
tion of the simulation and the measurement of the students
achievement .
Assistance in this task was obtained from the
Master Curriculum Guide availab l e from the Joint Counc il on
Economic Education .
Pret est and posttest .
The pretest consists of 2 5
mul t ip l e - choice and t en sho r t - answer questions measuring
achievement of conc epts the simulation was designed to help
t each .
The p osttest used in this study was a copy of a
test g iven over similar material in p ast years .
Risk and Reward Cards .
risks or rewards were typed on 3
Various events representing
x
5 cards and these cards
were used to communicate to the family the news of the
14
event .
Risk and reward cards were not always randomly
assigned the fami l ies; the events were divided into those
that were random events and those which depended upon the
dec ision of the instruc tor .
This was done to maintain the
real ism of the moedl in that not al l r isk or reward events
were representations of pure chanc e .
Those based on random
chance were p laced together along with nine b l ank cards
and these cards were shuffled and one p icked and this card
represen t e d the pure chance or random event .
B lank cards
were used to repr esent no event and to help balance the
number of risks an d r ewards the famil ies might fac e .
R isk
and reward events that depended upon dec ision were assigned
to famil ies dep ending upon their charac teristics and
descrip tions and the manner in which they comp l e t e d the
simulation process .
Net worth worksheet .
A worksheet was designed to
guide each family in determining total assets and to tal
l i ab ilit ies a t the beginning of the simul ation .
F amily goals and budget a t tack plan .
A worksheet
was made to encourage students to make both sho r t - t erm and
long-term goals p r ior to beg inning the budget process .
The
budget a ttack p l an was designed to for c e each simulat ion
family to divide the budget into categories and t o assign
each c ategory to a student r o l e - p l ayer .
This at tack p l an
provided a method f or the instructor to know what each stu­
dent within the cl assroom was resp onsibl e for doing in each
15
simul ated family .
Intr o duc ing the simulat ion .
Each student rec eived
a handout on the first day of the class which included a
c lassr oom discip l ine p lan , course descr ipt ion and obj ectives ,
gra ding system , and description of the simulation to include
all. the ac tivity assignments.
The first two days of the
c l ass were devoted to an explanation of the course and the
simulat ion .
Students were asked to dec ide which of the
p o tent ial roles within the simulation they would l ike to
p l ay.
A bul l e t in board il lustrating all potential r o l es was
.displayed in the room .
The students were told that their
task was to rol e-p lay a family memb er within the simulation
and to work within that family set t ing to develop a budget
for a one month p eriod using information obtained by doing
ac t iv:;.ty assignments as a basis for deciding how much would
be spent on each budget category .
Conducting the simulation .
The film The Money Tree
was shown to introduce the topic of money management .
S tu­
dents volunteered to p l ay sp ecific roles within the simula ­
tion as their names were matched to roles written on the
boar d .
The students then worked with other students in
their resp e c t ive simulat ion famil ies to comp l e t e the family
budget proc ess .
Each student rec eived a family descript ion
and each family rec eived a copy of a net worth worksheet and
a family goals and budget at tack p lan.
The first task of the family was to determine their
16
net worth using the workshe et .
Next , each family was to
comple te the family goals and budget at tack plan workshee t .
Each family was expec ted to create a family budget by
dividing the budget categories and assigning each category
of the budget to one of the student r o l e -player s .
Each
student would complete an activity assignment in the process
of det ermining the expected expense for that budget category.
After a l l a ctivity assignments and all budget categories
were compl e t e d ,
the family completed and turned in the
family budg et.
A l l materials turned in were placed in f i le
fol ders marked by family name and c l ass sect ion.
S tudents
worked on the simulat ion an average o f ' one hour per week for
a total o f t en hours over a ten week period dur ing the first
trimester , and ten hours over a· two week period of time
during the second and third tr imesters .
F ami l ies were a l l owed to share informat ion conc erning
family expenses so that memb ers of different fami lies coul d
work together to d�t ermine various budget expenses .
When
several famil ies encountered a common budget prob l em , as
each sect ion did with regar d to life and car insurance
expenses , arrang ements would be made for the entire c lass
to receive informa tion about such expenses .
This was pro­
vided by outside speakers , by teacher lead lecture and dis­
cussion or by audi o-visual aids .
Rules c onc erning the play
of the simulat ion included the following :
1.
Each family must make up a budget for a one
month per iod including expenses which may not
17
b e paid each month ( car license fee s , for
examp l e , had to be budgeted on a monthly b a si s ) .
2.
Every ' f amily in the simulation lived and worked
in O thel l o .
3.
Family members not now working who wanted to go
to work could ob tain only those j ob s they were
qualified for and could prove an opening existed
a t that time in Othe l l o .
4.
Families could sel l their possessions or buy
p o sse ssions of the other families in the simula­
tion a t any agreed upon price .
5.
Families could buy merchandise at any proven
a dvert i sed price .
6.
F amilies or sing l e p eople could live together
and share expenses if al l memb ers of the group
so sharing were in agreement .
7.
S tudent work within the simulation would b e
graded b y recording ac tivity a s signmen t s comp l e t e d .
After comp l eting the family budget f o r the one month
p erio d , the family turned in the family budget and a l l
accompanying ac tivity a ssignment s .
I.reviewed their budget
comparing it to their activity a s signment s and suggested
revision if their budget seemed l acking in some resp ec t .
After each comp l e te d family budget was approved , the family
simulated an on- go ing process by rec eiving reward or risk
car d s .
Each day spent in c l a s s on the simulation was
intended to simulate one year in the life of the family .
18
Description of the Population
This simulation · vms conducted_ in a twelve week
Consumer Economics cl ass in Othel l o High Schoo l .
The c lass
is a required course for all eleventh grade students .
The
simulat ion was con duc ted in two different sect ions each of
the three separate trimester or twelve week peri ods of time .
A total of 1 6 3 students were involved in the simulat ion .
Othe l l o is l o cated in a rural community with 6 5 0 students
enro l l e d in the high school .
One- fourth of the student b o dy
consists of Spanish surnamed students and a total of 1 5 8
students were identified as migrant students during the
1 9 8 1 - 8 2 school year .
The course .in which the simulat ion
took p lace is a required c lass for el eventh grade students
and students are assigned into the sect ions by computer .
Methods of C omparison
A pre test was administered to two sect ions of stu­
dents participating in the simulat ion during the first tri­
mester .
No pretest was administered second or third tri ­
mester .
Posttest scores were used to compare knowl edge of
ob j ec tives de. a l ing with budgeting , saving and investing of
those 1 6 3 students p ar t icipating in the simulat ion in
1 9 81- 8 2 with scores on the same p osttest of 1 4 0 students
taking the c l ass but not p ar t i c ip ating in the simulat ion in
1980- 8 1 .
Chap ter 4
RESULTS
Two s e c t ions of students to taling 56 s tudent s
p ar t icipated in the p r e t e s t and p o s t t e s t .compar i s on during
the fall trime s t er .
The average pre t e s t score was 4 5 . 19 and
the average p o s t t e s t score was 6 9 . 9 6 .
A p o s tt e s t only
comparison was made of all 163 s tudent s par t i c ip a t ing in the
s imula t ion during s cho o l year 1 9 8 1-82 with 1 4 0 s tudents
taking the same c l a s s and the same p o s tt e s t but not par t i c i­
pating in the s imul a t ion during s cho o l · year 1 9 8 0 -8 1 .
Post­
t e s t averages for s tudents p articipating in the s imulation
in 1 9 81-82 was 7 4 . 3 2 and for tho s e s tuden t s not participating
in the s imul a t ion in 1 9 8 0 -8 1 the p o s t t e s t average wa s 7 3 . 1 6 .
A compar i s on of pret e s t and p o s t t e s t s cores of the
f ifty-six student s invo lved in the s imul ation during the
fal l trime s ter does demon s trate a sub s tantial improvement in
average scores from 4 5 . 1 9 to 6 9 . 9 6 .
A number of var iab l e s
other than the s imul ation may have contributed to this gain .
The s imulat ion was conduc ted on the average of one day a
week over a ten week p eriod during the fir s t trime ster - .
Various o ther teaching techniques were used during this
s ame ten week period to teach obj ectrives related to money
management ,
saving and inve s t ing .
It is difficult to deter­
mine if the improved t e s t sc ores were the result of the
19
20
siraulation or the resul t of other variables . Ano ther study of
the sub j ects during the days the simulation was not used may
have contributed t o posttest gains due to the . similarity of
S tudents took the pret e s t the first week of
the two tests .
school and the p o s ttest about ten weeks later .
Scores may
have improved as the resul t of students being more settled
into the scho o l routine after ten weeks of school .
Students
were aware that the pretest was not a part of their cl ass
grade and that the posttest was a p art of their 'cl ass grade .
Too raany p o tential sour ces of posttest improvement existed
to make any c onc lusion supporting the use of the simulat ion
as a cause for pre test to posttest gains .
A comparison of p osttest only scores indica t es no
significant differences b e tween students using the s imulat ion
and those no t using the simulat ion .
As this compar ison is
made b e tween two l arge groups with no apparent differ ences
o ther than the use or non-use of the simulation ,
it seems to
be a more val id comparision than that based on pretest and
posttest scor e s .
During the second and third trimester , the
simulation exercise f o l lowed a brief introduction of the
concepts involved in the simul ation .
· In 1 9 8 0 - 8 1 this
material was presented in a convent ional l e c ture and dis­
cussion approach in a three week period of time .
year 1 9 8 1-8 2 ,
In school
this material was condensed into a one week
presentation using a convent ional lecture and discussion
technique fol lowed by a two week app l i cat ion of the simula­
tion .
The posttest was then adminis tered .
Posttest scores
21
were then u s e d t o compare s tude n t achi evement o f 1 9 8 0-81
when students r e ce ived thr ee weeks of . traditional in s truction
with 1 9 8 1 - 8 2 student achievement when students· received one
week of tradit ional instruct ion and two weeks of s imulat ion
act ivity .
Average s core of s tudent achievement in 1 9 8 0 - 8 1
without the s imul ation was 7 3 . 1 6 and for s tudent s u s ing the
s imulation in 1 9 8 1 - 8 2 the average p o s tt e s t score was 7 4 . 3 2 .
22
Chap ter 5
SUMMARY , CONCLUSION S , AND RECOMMENDAT IONS
Background
The family budget simulation was designed to provide
an opportunity for students to role- p lay a family situation
requiring the creation of a family budget .
The goal was to
provide an opportunity for students to study the process of
family budgeting in an environment as c l ose to real - l ife as
possib l e .
Proc edures
The simulation was design e d , introduced and conduc ted
in two sect ions each trimester for thr ee consecutive t r i ­
mesters .
Pre test an d posttest compar isons were made of the
first app l icat ion .
Posttest only scores were used to compare
all three trimesters app l icat ions with students taking the
same c lass the previous year .
Results
The first app l i cat ion of the simulation resul ted in
an imp rovement of pretest average of 4 5 . 1 9 to a posttest
average of 6 9 . 9 6 .
A comparison of posttest only scores
resul ted in a f inding of no significan t differences between
students using the simulat ion and students not using the
simulat ion .
23
Conc lusions
Conclusions regar ding the effectiveness of this
simulation must be tentative .
gains were substantial ,
Although pretes·t to postt est
too many variab l es existed to insure
that the gains were due solely to the simulation experience .
Al though students expressed an interest in the simulat ion
activi t i es and the instructor f e l t that they were more
motiva te d to learn as a result of the simulation , no evi­
dence was obtained by posttest comparisons to indic .ate that
students l earned more b y the use of the simulat ion than they
would have l e arned by use of more tradit ional classroom
teaching techniques .
Recorrl.Ill enda t ions
Recorn.'1lenda t i ons are suggest ed in the design of the
study , the design of the simul ation and the app l icat ion of
the simulation .
The design o f the study coul d b e improved b y
establishing three difference groups with students randomly
assigned into each gr oup .
The simulation would then be
administered to one experimental group , and a control group
would b e taught the same concepts b y conventional l e c tur e ­
discussion technique .
A third control group woul d receive
no instruction of any typ e involving the concepts b e ing
tested .
A standar dized test such as those availab l e from
the Joint C ounc i l of Economic Educ ation could be used as
both a pretest and p osttest to make c omparisons of the three
group s .
This design would provide for more controls .
The
2l1
review of the l i t era ture , however , suggests that its unlikely
any comparat ive study design will result in new and valuable
findings unti l a better measure of what simulations actua l ly
do teach is created .
The design of the simulat ion may be
imp roved by a revision of the family descrip t i ons and the
activity assignments .
The students could a l l begin the
role-playing situat ion as single wage- earners hol ding j obs
that graduat ing seniors may reasonab ly expect to ob tain .
The single wage- earners could then marry and form families
as the simulat ion process continues .
Some students using
this simulat ion f ound i t difficul t to i den tify with the
family role- p l aying p osit ion they faced .
B eginning the
simulat ion as single wage- earners may help students to more
readily identify with their role within the simulation .
The
budget o f the singl e wage-earner ought to be easier for the
students to understand and to comp lete; this experience
should be helpful when the studen ts face the task of making
the family budget as the simulat ion continues .
Some students
also related to difficul t ies in comp leting the activity
assignments .
I t might be advisab le to use activity assign­
ments that were more sel f - contained packages that included
all information necessary to make a decision involving a
given set of cho ices .
For examp l e , all students could begin
the simulat ion as single wage-earners looking for an apart­
ment to rent .
A p a ckaged ac t ivity assignment could be
wr itten and provided each student role-p layer that would
describe five different ap artments and require them to
25
decide \•Jhich o f these apartments that student r o l e - p l ayer
would prefer to rent .
Students could be asked to explain
why they made the cho i ce they made .
This proc edure could
b e f o l l owed with each activity assignment and each category
of the budget .
Such a revision of the simulation would
make the student r o l e - p l ayers' r o l e much easier .
However ,
these changes wou l d modify the model to make it less l ife­
l ike; famil i es do not have an instant source of pre-packaged
information and a narrow choice of three or four options with
regard to their budget options .
In the process of searching for and l ocating infor­
·mation nec essary to make budget
decisions , the student in
the simulation as now designed is learning valuab l e l essons;
if such information was handed him, those lessons would not
be l earne d .
The appl ication of the simulation coul d be revised
by changing the time frame and improving the communication
channe l s .
I recommend that this simulation b e used in a
year long c l ass and suggest that it b e conducted in a senior
year class such as Diversified Occupations .
The longer term
would a l l ow the simulation to be introduced and conducted in
a more comp l ete and deta iled fashion, and it would allow for
more use of risk and reward event s .
Methods o f communicating
with the entire group while allowing for individua ls to
engage in the ir rol e-playing situations are also rec ormnende d .
The bul l etin board could b e used as a focus and teaching tool
to il lustrate vari ous roles within the simulation, to show
26
results o f one o r a l l of the budg e t s , t o provide information
and cho ice for any part · of the budget process , and to
announce community news in t erm·s of r isk and r_eward events .
A suggestion box f or group discussion topics might prove
helpful as a method of having groups t e l l the instruc tor
what topics that group woul d l ike to have more information
on .
This instruc tor found that a l l of these methods , p lus
a brief four or five minute daily review of the simulation
to include time for questions , was nec essary to help students
to comp l ete the family budget simul ation .
B IBLIOGRAPHY
27
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28
29
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'� s s e s sment of S e l ec ted
Hender son , B . G . & Garnes , W . G .
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30
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� c
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� m
� i� c �E_d_u
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.,� � _, ,,9� .
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Appendix
TABLE OF CONTENTS
31
32
TABLE OF CONTENTS
. T it le
Page
D e s cr ip tion and Direct ions for Family
Budget S imul a t ion . .
34
Risk and Rewar d Even t s
36
Work sheet to Determine N e t Worth
37
Family Goals and Budget Attack P lan .
38
Family D e s cr ip tion Forms .
39
.
.
Activity A s s ignment 1 .
E s t imating Wife's Net Income
43
A c t ivity A s s ignment 2 .
Comp ar i s on of Hous ing C o s t s .
45
Ac t ivity A s s ignment 3 .
a Home .
.
. .
C o s t of B.uying or S el ling
Activity A s s ignment 4 .
Banking .
Activity A s s ignment 5 .
Banking -Rol e- S i tuat ion
48
Activity A s s ignment 6 .
C o s t s of Go ing to C o l l ege .
49
Ac t ivity A s s ignmen t 7 .
Maj or Purchas e
50
Activity As s ignment 8 .
Adver t i s ements
51
Activity A s s ignment 9 .
Life Insurance
52
A c t ivity A s s ignment 1 0 .
Car In surance
53
Activity A s signment 1 1 .
Credit App l icat ion .
54
Ac t ivity A s s ignment 1 2 .
Inves tment P l ans .
55
Ac t ivity A s s ignment 1 3 .
Job Want Ads /App l icat ion .
56
A c t ivity A s s ignment 1 4 .
Job H i s tory
57
Activity As s ignment 1 5 .
Occupat ional Outlook Handb ook
58
Ac t ivity A s s ignment 1 6 .
F o o d Menu for Week .
59
Ac t ivity A s s i gnment 1 7 .
Grocery Store Compar i s on .
.
46
47
.
.
.
.
.
.
60
33
TABLE OF CONTENTS ( c ontinued)
Title
Page
Activity As s ignment 1 8 .
C o s t s Per Mile o f
Dr iving C ar . . . . . .
62
Ac t ivity As s ignment 1 9 .
C o s t s of Entertainment .
63
Ac t ivity A s s ignment 2 0 .
Selecting an Apar tment .
64
Key Ec onomic C oncep t s that S imulation
Helps to Teach . . . . ; . .
.65
Pre- Te s t for Budget S imulat ion
66
P o s t t e s t for S imulation .
67
.
.
.
34
DE SCRIP TION AND D IRECTIONS FOR FAMILY BUDGET S IMULATION
A s imulation is an imi tation of a real ongoing proce s s .
This
s imulation is an imitat ion of the money management proc e s s .
You have b een a s s igned a r o l e to p lay within a family who s e
task i s t o make a budget des igned t o ob t ain the goal s o f the
fami ly .
You are a sked to p l ay the role you are given as if
you were really that p er s on .
Your j ob is to contribute t o
the making o f the family budge t .
Each family descript ion
includes ba s ic informat ion conc erning income , expens e s and
p o s s e s s ions .
I real ize that some of you may not see your ­
self ever f il l ing the r o l e you have been a s s igned--you may
not s e e your s e l f ever f illing the r o l e of b eing a nur s e , or
having a large family , or b e ing a working wife or whatever
you have b een asked to p l ay .
However , unfamiliar or
unapp eal ing y o u find your ro l e , p l ay i t as if you were really
that p erson .
The r o les have been created to repr e s ent a
cros s-sec tion o f oc cup ations , income s , exp ens e s and family
s izes of p eople in this community .
Each
The t a sk of each family i s to create a family budget .
In
family memb er shoul d contribute to the final product .
order to obtain knowledge for various typ e s of exp ens e s
( f o o d , housing , transportat ion , insurance , etc . ) , you are
The s e activity
exp ected to comp l e t e activity a s s ignment s .
a s s ignment s will involve you in the c o l l ec tion and analy s i s
of informa tion wh ich will guide you in your money manag ement .
I do not exp ect each of you to do every activity a s s ignment ,
but each family mu s t do the s e a s s i gnment s they need .to do to
obtain information neces sary for the making of a budget .
Pro c e s s for comp l e t ing the s imulation .
1.
Family net worth sheet
Each family should f i rst cal culate their net worth by
comp l e t ing the net worth shee t .
2.
Family goal p l ann ing
Each family should decide what they want their budget to
Goal s should
accomp l i sh; what the goal s of the family are .
include short-term ( 1 year ) and long-t erm goal s .
3.
Dec ide what you need to know to make a budge t .
Wr ite down the typ e s of expen s e s that you need to know more
about before you make up a budget .
You can then decide what
you need to l e arn about before you make your budget .
4.
D ivide the work
Decide which family memb er wil l obtain what information .
You
may divide up the various ac tivity a s s ignments at this p oint
and have different family memb ers work on different areas of
expense s .
35
5.
Collect information , comp l ete activity a s s ignment s , and
begin making budget .
Budget comp l ete d .
After you have comp l eted . your budget ,
6.
which is to b e for an average month , you will b e given an
opportunity to u s e it for a s imul ated of 5 - 1 0 year s .
Various
events will take p lace during this s imul ated t ime p eriod which
The s e even t s are
will effect your money management program.
des igned to r ep r e s en t the real events in a family ' s h i story .
Some will b e j oyous occas ions l ike promotions , p ay incre ases
and tax refunds an d some will b e hardship s l ike loss of j ob ,
After each of the s e event s ,
death in the family and the l ike .
you will be a sked to
a . revi s e n e t worth sheet
b . r e c - c on s ider family goals
c . review and / or revise family budget
This pro c e s s will continue until t ime runs out at end of the
trime s t er .
36
R I SK AND REWARD EVENTS
The s e event s are typ e d on 3x5 cards and given to fami lies on
b a s i s of chan ce or my dec i s ion . A figure rep resenting l o s s
o r rewar d would b e p enciled onto each car d .
R I SK ( CHANCE EVENTS )
Unexp ected kids
Death of husban d , wife , or kid
House fire
S ickne s s , inj ury , hospitalization
Auto acc ident
Theft l o s s
Vandal ism l o s s
D i s a s t er ( Mt . S t . Helens )
Death of friend or rel ative
R I SK (MY DEC I S ION EVENTS )
Expected kids
Busine s s cutback , l o s s of j ob
Lo s s of j ob
Wife l o s t j ob
Kid gets driver ' s l icen s e
Appliance r ep air
Home repair
Appl iance rep lacement
Need new car
Auto repair
D ivorce
Tax due
REWARD ( CHANCE EVENT S )
Gifts from o thers
Inheritance from relative s
RISK (MY DEC I S ION EVENT S )
Job promotion and / or sal ary incr e a s e
Inve s tment re turn
In tere s t on savings
Income from second j ob
Income from addit ional family memb er g e t t ing a j ob
Tax re turn
37
WORKSHEET TO DETERMINE NET . WORTH
My worldly p o s s e s s ions ( a s s e t s )
Exp r e s s in current marke t value if convert.ed into dollars
C a sh on hand
Cash value of l ife insurance
C a sh in checking account
C a sh value of r e t irement p l an
C a sh in bank
Cash in Savings and Loan A s sociat ion
US Savings Bonds
US Tr easury Notes
C orporate S tocks
Car
Furniture
C lothing
Mob i l e Home
Other P o s s e s s ions :
My deb t s ( l iabil i t ie s )
Notes payab l e
Car p ayment s
Furniture payment s
Mortgage p ayment s
Other ins tal lment p aymen t s
TOTAL L IAB ILITIES
��
��
AS SETS -LIAB ILITIES
=
NET WORTH
38
Family s imulat ion name
�������-
S tudent memb er s o f family
FAMILY GOALS AND BUDGET ATTACK PLAN
A.
FAMILY GOAL S OR PRIORITIES
In a paragraph, explain the goal s or priorities of your f amily .
Thes e would b e the things you hope t o achieve a s a family by
l iving on your budget .
Include goal s for the shor t - t erm
( 1 year or le s s ) and for the long - t erm ( more than 1 year ) .
B.
BUDGET PLAN
Make a l i s t of exp ens e s which your family budget mu s t include .
Decide which member of the family will b e r espon sible for
obtaining informat ion , comp l e t ing the activity a s s ignment ,
and deciding how much money should b e budgeted for each l i s ted
exp en s e s .
L i s t of exp ected budget expens e s - - - - -Name o f s tudent responsib l e for
FAMILY NAME
39
Mr. Checker and Miss Finance
FAMILY DESCRIPTION FORM
BUDGET S IMULATION
This includes a l l present sources of income , but not all
pre s ent exp en s e s .
U s e this information and the activity
a s s ignments to make your budget .
Your budget i s a monthly
budget , but include amounts for tho se p ayments that you may
make only once or twice a year ( y ou may pay something every
6 month s, but show amount you are s aving each month to make
that payment in 6 months ) .
Rememb er that this' s imulation
wil l cover a 7-10 year p eriod of the family's l ife; many
things can and will happen .
INCOME
His $4.50/hr. 30 hrs. week
Hers $3.50/hr. plus tips
(less than $2/hr.)
Savings
EXPENSES
Hou sin g
Rent :i;l75 - l bedroom, unfurnished
Mortgage
Car ( s )
Checking Ba lance - exp r e s s e d
a s a min imum amount at end
of average month .
Investments
/1 1 . Des cription
Payment
1980 Camara
$185 a month for 32 more
months..
/1 2 . De scription
Payment
Fringe Benefits from Job
Insurance
Retirement
C.h arge Cards
FAMILY P O S SE S S IONS
Sears
No card
Boat None
Stove
Furniture None
Refrig . None
Penny ' s
Stereo
Freezer None
G as Company
Yes
Other:
Master / V i s a
No card
TV
None
None
Washer / Dryer None
None
No card
·-
no balance
In sta l l ment Accounts
Car loan from bank
BRIEF DESCRIPTION OF FAMILY ROLE-S ITUAT ION
Mr Checker is a 20 year old high school graduate who has worked 2 years as
a part-time box boy and l year as a checker at a grocery store. As a box boy,
he made minimum wage (#3.35/hr.) and as a checker he is making $4.50 an hour.
He seldom workes 40 hours a week--usually 30, as the store prefers part-time
checkers. Mr. Checker has no special vocational training and has held no other
jobs except for farm labor.
Miss Finance is a 19 year old high school graduate who is working as a
food waitress. She usually works 30 hours per week for $3.50 per hour plus
tips (seldom makes less than $2.00/hr. in tips).
Mr Checker and Miss Finance are engaged to be married in 4 months.
She lives at home and he rents a small, l bedroom apartment that is unfurnished,
and neither has any household possessions. He pays $175 a month for his rent
and has his car. She does not have her own car.
FAMILY NAME
40
Ml'.' . Cl ean
FAMILY DESCRIPTION FORM
BUDGET S IMULATION
Thi s includes a l l _ pr esent sour c e s of income , but not all
present exp en s e s .
U s e this information and the activity
a s s ignment s to make your budge t .
Your budget is a monthly
budge t , but include amount s for tho s e p aymen t s that you may
make only once or twice a year ( you may pay something every
6 month s , but show amount you are s aving each month to make
that payment in 6 months ) .
Rememb er that this s imul a t ion
will cover a 7-10 year p eriod of the family ' s life; many
things can an d wil l happen .
INCOME
EXPEN SE S
Hous ing
H i s $5.75/h r . 40 hr. week, year
Hers
round
Rent
Mortgage
Savings $300 . 00
Car ( s )
Checking Balance - exp r e s s e d
a s a minimum amount at end
of average month .
$200 . 00
Inve s tmen t s None
If 1 . De s cription
Payment
ff 2 . D e s cr ip t ion
Payment
'81 Firebird
$200/month for 30 months
Fringe Bene f its from Job
Insurance Medical , dental , vision
paid for
Ret i rement Matching 3% pay deduction
Charge Cards
FAMILY P O S SE S S IONS
Boat
Sears No bal ance owed
No-in
.a_partment p
Bal ance owed $200 . 00 (cl othes)
enny • s
Re ·rig No-in
aoartment
Gas C ompany No ba1 ance
Fr e e z er No
No Card
Ma ster/Visa
Other :
No
S t ove
f
Furniture None
S t ereo
TV
No
No
Washer/Dryer
No
In s tal lment Acc ount s
None
BRIEF DESCRIP TION OF FAMILY ROLE - S ITUATION
Mr . Cl ean is a high-school drop-out who ·finished 3 years of school prior
to going into the Army . He served 3 years as an infantryman . For the past
year he has been working as a custodian for the school district . He is
divorced and pays $150 a month chil d support to his ex-wife . Mr . Cl ean woul d
l ike to go to a trade school and l earn a trade that woul d increase his income
and al l ow him to change jobs . He thinks he woul d l ike to be a pl umber.
41 ·
FAMILY NAME
Mr ;
and M r s . D e n t i s t,
and Son
FAMILY DESCRIPTION FORM
BUDGET S IMULATION
Th is includes a l l p r e sen t sources of income , but not all
pres ent exp en s e s .
U s e this informat ion and the a c t ivity
a s s ignmen t s to make your budge t .
Your budget is a monthly
budge t , but include amount s for tho s e payment s that you may
make only once or twice a year ( y ou may pay something every
6 months , but show amount you are saving each month to make
that p ayment in 6 month s ) .
Rememb er that this · simulation
will cover a 7-10 year period of the family ' s life ; many
things can and will happen .
EXPEN S E S
Hous ing $650 (bought $65,000 home
Rent
2 years ago)
Mortgage
INCOME
His $40, 000 annual gro s s
Hers None
Savings $ 3 , 000
Car ( s )
Checking B a l ance - expres s e d
a s a min imum amount a t end
of average month .
11 1 . D es cript ion
FAMILY P O S S E S S IONS
Charge Cards
' 81 Pontiac
P ayment $200/month for 40 more months
' 80 Volkswagen Dasher
11 2 . D e s cription
1
0
shares
Investm�nt s
of Boeing,
P ayment $175/month for 28 more months
20 of I B M, $ 2, 000 in U S Savings Bonds,
Fr inge B ene f i t s from Job
Mature in l years
Insurance in business for himself
must pay for insu rance.
Re tirement in business for himself mu st provide retirement
Low of $1 , 000
Boat 18 ' ski boat
I kid ) iked to s k i )
Purr1itur�
S t ove Yes
Sears
balance owed $800.00
comp l ete tairly new
S t ereo Yes
Refr ig . Yes
P enny ' s
Freezer
Gas Company no balance
TV
Other :
Yes
Washer/Dryer
Yes
Yes
balance owed $ 200. 00
Ma ster/Visa
balance owed $500 . 00
In s tal lment Accounts
BRIEF DESCRIP TION OF FAMILY ROLE-S ITUATION
Just bought new
dinette set . and new sofa
plus end tables -owes $1, 001
at $ 1 0 0/month for 1 2 month!
You are a 42 year old dentist and have had your own dentist office for
10 years. You are married and have one son who ju st graduated from high
school.
Mrs. Dentist has 5 years experi ence as a beautician , but has not
worked in the last 1 0 years . Mr. and Mrs. Dentist would like to build
a savings, investment , and reti rement plan. He has a 1 0 , 000 life
insurance pl an that he has had for 17 years - -it is a whole-1 ife pol icy.
He has not been able to build much retirement while he was raising his
son, but now he wants to be able to retire in about 1 0 years.
FAMILY NAME
42
Mis s Teller
FAMILY DESCRIPTION FORM
BUDGET S IMULATION
Th is includes a l l pr e sent s ourc e s o f income , but not all
U s e th is informat ion and the activity
pres ent expen se s .
Your budget is .a monthly
a s s ignments to make your budget .
budge t , but include amounts for tho s e payment s i:hat you may
make only once or twice a year ( you may p ay something every
6 month s , but show amount you are s aving each month to make
that p ayment in 6 month s ) .
Remember that: this s imul at ion
wi l l cover a 7-10 year period of the family ' s l ife ; many
things can and wil l happen .
INCOME
His N/A
Hers $650 gro s s per month
Saving s None
Car ( s )
Checking Balance - exp res sed
a s a minimum amount at end
. of average month .
$1 00.00
Inve s tmen ts
EXPEN SES
Hous ing
Rent
Mortgage
None
IJ 1. D e s cript ion
Payment
1 972 Plymouth. Duster
paid for
IJ 2 . D e s cr ip t ion
P ayment
Fringe Bene f its from Job
Insurance Bank pays for medi ca 1 , denta 1
and v i s i on
Retirement Yes. Bank pays al 1 --no deductions from h e r pay.
FAMILY P O S S E S S IONS -none just
Charge Cards
Boa t
Sears
Non e
Furniture
None
g out
S t bVetin
None
Refrig . None
owes $440 for clothes
P enny ' s
no balance
S tereo None
Freezer None
Gas Company
owes $1 00 for t i res
TV
Other :
Ma ster/V isa
None
None
lV'a sher/ Dryer None
In stallment Accounts
None
BRIEF DESCRIP T ION OF FAMILY ROLE - S ITUATION
You are an unmarri ed 20 year old woman . You graduated from h i gh
school two years ago and after study at Kinman Business College, you have
just found a job as a bank teller.
43
ACT IVITY ASSIGNMENT 1 .
Direction s :
E S TIMATING WIFE ' S NET INCOME
U s e the worksheet for e s t imating wife ' s net
inc ome from empl oyment .
You may e s t imate on the b a s i s o f
her pre s ent j ob o r you may e s t imate on the b asis o f any j ob
op ening in the commun ity for which she has qualifications
to obtain .
Your e s t imat e s mus t all b e "gue s swork" b ased on
informa t ion that you may get from p eople who now hold that
j ob .
In o ther words , if your wif e is now, or would l ike to
be , a food wa itre s s , what you should do is use the workshe et
and talk to s everal waitre s s e s and have them help you to get
some information f or the s e exp en s e items .
Rememb er t o adj ust
your es t ima t e s to fit your rol e - s ituations ; if you w ill need
to hir e a baby- s i tter , you mus t e s t imate that cos'c .
Goal or . obj ective I exp ect you to meet by do ing thi s
I exp e ct you to b e ab l e to gather and app l y
activity :
informat ion about addi tional expen s e s that are incurred wh en
a family has a s e cond inc ome from the wife working .
I exp ect
you t o dis cover that the addi tional expen s e s of a wife
working mus t be subtracted from her gro s s income b efore the
.
family can budget monies her work adds to the family budg et .
C oncentrate on tho se expen s e s that would not b e incurred
if she were not working .
WORKSHEET FOR ESTIMATING WIFE ' S NET INCOME FROM EJvlPLOYMENT
.
Gro s s Income
.
.
. $
__
Expen s e s :
.$
1.
Inc ome taxe s .
2.
Social S e cur ity tax
3.
Contributions to o ther r e t irement p l ans $
---
4.
Me a l s and snacks at work .
.
.
.
.$
---
5.
Tran sportat ion to and from work .
.
.
.$
---
6.
Tran sp ortat ion on j ob (not re imbur s e d ) . $
---
7.
Sp ec ial work c l o thing ( including car e ) . $
8.
Dues to union s , p ro f e s s ional and
bus ines s organizations , emp loyee
club s , e t c . . . . . . . . . . . .
9.
.
.
.
.
.
.
.
.
.
__
.$
.
---
---
.$
---
Prof e s s ional and bus ine s s pub l icat ions . $
_
_
_
10 .
Prof e s s ional and busin e s s meeting s ,
conventions . . . . . . .
.$
---
11 .
E ducat ional exp ens e related to
emp l oymen t . . . . . . . . .
.$
_
_
_
12 .
Too l s and l ic en s e s required for the j ob $
---
13 .
Gif t s and flower s for f e l l ow emp loyee s . $
14 .
P ar t ie s , s pe cia l meal s with f e l l ow
emp l oyees . . . . . . . . . . . . .
.
.
.
.
---
.$
---
Extra s pent for general-wear clo thing
( including car e ) . . . . .
. . . . .$
---
16 .
Extra s pent for p aid help for
househo l d tasks . . . .. . . .
.$
---
17.
Ex tra s p ent for p er s onal care
.$
__
18 .
Other exp ens e s for spec ific j ob
.$
__
19 .
Additional food c o s t s ( family, ) .
.$
---
15 .
Total .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.$
Net income ( gro s s income minus total expen s e s )
.
.
.
.
.$
---
---
45
ACTIVITY A S S IGNMENT 2 .
Direc tions :
COMPARISON OF HOUS ING COSTS
C omp are the c o s t s and the benefi t s of at l ea s t
two different hous ing op tions .
Options that you .may c ompare
inc lude :
1.
buying a home
2.
rent ing an apartment
3.
.buying a trai ler hous e and renting the space
4.
renting a tra il e r hou s e and the sp ace
5.
buying a con domin ium
I sugg e s t that you compare one buying op t ion with at l e a s t
o n e rent ing opt ion .
Your compar ison of c o s t s and benefits
shoul d reflect factors other than c o s t s in terms of money .
Sources o f information :
U s e Chap ter 3 , "Meeting Your
·Housing Needs , " o f Learning to Be a Better Buyer .
Porter ' s Money Book .
money, j ob and l iving .
U s e Sylvia
U s e · changing Times 9 9 New ideas on your
You should a l s o u s e one very current
ar t i c l e in e i ther Changing Time s , Consumer Dige s t o r Con sumer
Reports that dea l s with housing cos t s .
You may a l s o want t o
refer to local r e a l es tate brokers for c o s t s of buying a home .
This activity as s ignment may b e comp l eted even if your r o l e ­
s ituation is such that there are n o t many op tions o p e n t o your
fam.ily; you may not b e ab l e to afford to buy a home , but you
can s t i l l do this comparison of hou s ing c o s t s .
I exp e ct your comp arison to be at l e a s t two p ages long .
p r efer i t to b e typ e d ,
doub le- spac e d .
I
I f you cannot typ e ,
or cannot talk someone into typing it for you , wri t e or
print neatly and l eave a margin of about one inch on b oth
s ides of the paper .
Goal or obj ec tive I exp ect you to meet in doing this ac tivity :
I exp e ct you to l earn where to f ind informa tion that allows
you to c ompare c o s t s and b enefits of s everal hous ing options .
I expe ct you to l e arn that not a l l c o s t s or b enefits are
f inancial in nature .
I exp ect you to be ab l e to make
recommendat ions a s tc which option b e s t ·f i t s your wan t s and
needs among tho s e you considered .
46
ACTIVITY A S S IGNMENT 3 .
Directions :
COST OF BUYING .OR SELLING A HOME
Read and s umma rize an article that describ es
co sts of buy ing or s e l l ing a home .
Guide to locate such an arti c l e .
Money Book or Chapter 1 2 ,
F inance .
You may u ii:"e the ReadS'_r ' s
You may u s e Sylvia Porter ' s
"Home Ownership " of Personal
Your summary shoul d b e a brief· description of the
typ e s of c o s t s often involve d in buying or s e l l ing a home .
After I have read and approved your summary , then you may
contact a local real e state broker and schedule a time to
meet with him to discus s the c o s t s of buying or s e l l ing a
home .
Rememb er that time i s valuab l e to him and b e sure to
be on time with p encil and paper to take note s when you go
to see him.
Select a specific hous e that i s l i sted in the
. paper or that his brokerage ha s for sale .
Try to get
specific dollar or percentage amounts for various c o s t s of
buying or s e l l ing a home .
Total the s e amounts and exp r e s s
the total a s a p ercentage of the price of the home .
Summar­
ize your f indings in written form in a shbrt one or two
paragraph conclus ion .
Th i s activity a s s ignment can b e done by its elf or in comb in­
ation with other a s s ignemnts that deal with hous ing c o sts .
You may want to talk to the real estate agent about factors
that influence the p r i c e of a home , or thing s to l o ok f or
when buying a home .
Make up a l i st of specific questions
or items that you want to l earn about before you go to s e e
the agent .
I t would be better if both husband and wife in
the s imulation could go together , but if this can not be
arranged either one could obtain the information and then
both could work on the summary and conc lusions .
I want the
final written product to be a group effort .
Obj ective or goal I exp ect you to meet by doing this activity :
I expect you to l earn about the costs invo lved in the buying
or s e l l ing of a home .
I expect you to l earn where you can
.
f in d information about the s e costs . . I exp ect you to determine
the approximate % of the price of a home that would b e involved
.
in buying or sell ing the hou s e .
47
ACTIVITY A S S IGNMENT 4 .
BANKING
Direction s :
F ind and cut out of the newspaper 3 different
adver t i s emen ts for bank s .
For each adver tisement des cribe
th l iquidity , the safety , and the exp ected re turn of that
bank .
If the adve r ti sement is for a NOW account , or other
typ e of int eres t- p aying checking account , describe the
safety , the r e turn , the minimum balance requi ted and the
"hidden c o s t " of this accoun t .
For this a s s ig11men t , I
sugge s t that your advertis emen t s not all ' b e the s ame - don ' t
c o l l e c t 3 ads that all adver t i s e the s ame thing .
This a s s ignment i s intended to a l l ow you to apply your s tudy
of l iquidity , safety and return to adver tisemen t s for bank s .
I t is not meant to b e l imited t o tho s e banks or savings
p lans that you r o l e - s ituation would l imit you to .
In y our comparison cif the s e 3 ( or more ) advert is ement s ,
include any other information that you feel might be imp o r ­
tant in de c iding which bank would b e the "best cho i c e " f o r
your needs .
Factors o ther than l iquidtty , safety , and
re turn that you may want to con s i der might include location ,
b anking hour s , typ e s and numb er of s ervices offere d , hidden
c o s t s or catches l ike min imum balances requir e d , s ervice
f e e s charg e d and the l ike .
After d e s cribing tho s e factors that you can for each bank ,
I want you to t e l l wh ich of the s e banks seems b e s t for your
needs and why it s eems b e s t .
Turn in your bank ads , your
descrip tion of factors for eac·t b ank ( your compar i s on ) and
your conclusion as to which s eems b e s t for you .
Obj ec tive or goal I exp ect you to meet by doing th i s activity :
I expe ct you to b e ab l e to apply l iqudity , safety and return
to actual banking adver t i s emen t s .
I exp ect you to be ab l e
t o compare 3 bank ads on the s e factors and other factors you
feel imp ortant .
I exp e c t you to be ab le to make a recommen ­
dat ion among thos e bank ads s e l e c t e d upon information you
have as to wh ich s eems b est suited for your nee ds .
·
48
ACTIVITY ASSIGNMENT 5 .
BANKING-ROLE - S ITUATION
Directions :
U s ing your rol e - s ituation compare the s ervic e s
offered by a t l e a s t 2 different banks in Othello .
Compare
at l ea s t one ful l - service b ank to either Mutual Savings or
C ap ital Saving s .
Comp are on the b a s i s of safety , l iquidity
and exp ected re turn p lus s ervices offered that are important
to your rol e - s ituation .
Go to the banks and determine the
c o s t s of servic e s that you might nee d .
You mus t compare
checking p l ans and savings p lans that s eem b e s t for you of
tho se banks that you decide to u s e for your compar i s on .
C a l l the bank f i r s t and schedule a t ime to go and talk to
someone about the savings and checking p l ans they offer .
Dec ide which p l an or p l an s s e ems b e s t for your rol e - s ituat ion
at each of at l e a s t two bank s .
Summarize the p l an you have
cho s en for each bank .
Then compare the two banks and decide
which p lan ( if eithe r ) seems to be the b et ter .
In your
summary and compari son , use real numbers involved in the
Te l l the banker
c o s t s of checking or the return on savings .
wheri you f i r s t call that you are role- p lay ing a family budget
s i tuation and that you would l ike to talk to them about the
Try to arrange a
checking and savings p l ans they offer .
time that both husband and wife in the rol e - s i tuat ion can go
to the bank together .
You will turn in to me a sumrnary of the p l ans offered by each
b ank and a conclus ion as to which p l an ( s ) s eemed b e s t to you .
B e s i de s checking and savings you may want to compare other
s ervic e s that the bank may offer :
I sugg e s t you ask about
type s of loan s and intere s t rates for each typ e .
Obj ectives or goal s I exp ect you to meet by doing this ac t ivity :
I exp ect you to learn about the different checking and/or
s aving s · p lans offered b y at l eas t 2 different kinds of banks
in Othe l l o .
I exp ect you to be ab l e to decide which p l an
s e ems b e s t for your rol e - s ituat ion .
49
ACTIVITY A S S IGNMENT 6 .
COSTS OF GO ING TO COLLEGE
U s ing informat ion available in the Guidance
D irections :
Office , compare the c o s t s of going to 3 different colleges .
Of the 3 c o l l eges you selec t , p ick one that you are really
interes ted in attending and of the other two , p ick one l ike
and one unl ike the one you exp e c t to a ttend .
In o ther wor ds ,
if you exp e c t to a ttend a private s chool ( l ike Whitman ) ,
compare the cos t s of that school ( Whitman ) witn ano ther
private s chool ( Whitewo rth , Gonzag a , PLU ; etc . ) and one
pub l ic s chool ( l ike a s tate university ) .
If you exp e c t to
go to WSU , you may p ick one l ike ( Univer s ity of Washington)
and one unl ike ( a p r ivate · s chool or a j unior c o l l e ge ) .
P l e a s e inc lude as much of the f o l l owing information as you
can ob tain in your comparison :
Room and board
Travel expen s e s ( t o and from c o l l e g e )
In addit ion to the information in the Guidance Office , read
and summarize any article describing c o l l ege c o s t s and how
to pay them .
Sour ce s of informa tion include Sylvia Porter ,
Con sumer Dige s t , Consumer Repor t s and Changing Time s .
You may e l e c t to do this s ame c o s t compar ison with trade or
vocational scho ol s .
For certain typ e s of trades and vo c a­
tions do not forget the Armed F orces a s a training program .
The paper that you hand in to me will b e a comparison of the
c o s t s of going to the s e 3 different s choo l s .
Try to compare
on al l the c o s t factors that you can .
In addition to co s t
factor s , l i s t o ther factors that you feel might b e important
con s i dera tions in deci ding which p lace to go .
Then t e l l me
which of the s e you feel mee t s your specific goal s or desires
Include at least a one p age
and why you feel that way .
dis cus sion o f sour ce s of f inancial help in paying for c o l l ege
costs .
Try to make this apply to your s i tuat ion .
Obj e ctive or goal I exp e c t you to meet in doing thi s ac t ivity :
I exp e c t you to become more aware of the c o s t s of col lege
and of various methods that you may use to meet tho s e c o s t s .
50
ACTIVITY ASS IGNMENT 7 .
MAJOR PURCHASE
D irection s :
U s ing Consumer Reports a s your b asic sour c e of
informat ion , wr ite a summary in which you describe the
· fo l l owing for any maj or purcha s e you might be considering :
1.
De s cribe several specific qualities or characteri s ti c s
that are des ired in that particular produc t - - these would b e
character i s t i c s that you woul d want in this product that
not a l l of the produc t s would have .
2.
Name and de s cribe s everal sp ecific band name s of the
product that were j u dged particularly good in t erms of tho se
qual itie s that you j u s t l i s t e d .
3.
T e l l me which one of the various pro duct s that . you . .might
cons ider buying .
You may do this a ctivity as s ignment as a part of:-your s imu-·
l a t ion - - in such ca s e , it could b e a group proj ec t .
You may
·a l s o do this a s s ignment a s an individual for a particular
product you are inter e s t e d in buying .
Consumer Reports
usually has specific i s sues that are devo t e d comp l e t e ly to
analy s i s of one type of peoduct .
Examp l e s that I have seen
include s ingle i s sues devo ted to car s t ereo , is sue s devo ted
to c amera s , i s sues devo ted to home hi-fi and i s sues devo t ed
to new cares ( an annual feature each Apr i l ) .
This a ctivity a s s ignment may b e r epeated us ing differen t
Ob tain my approval pr ior to start of
typ e s o f product s .
any maj or purchase compari son a s s ignment .
I
Obj ective I exp e c t you to meet in doing this activity :
exp e c t you to b e aware of the value of Consumer Repor t s as
a source of information about produc t s .
I exp e c t you to
be informed about some of the imp ortant charac ter i s t i c s or
qualitie s to look for in a particular product .
I exp ect
you to b e ab l e to make a decis ion about the purcha s e of a
maj or produc t .
51
ACT IVITY ASS IGNMENT 8 .
ADVERT I SEMENTS
Direct ions :
Read S ec t ion 2 , "Adve r t i s ing to the Con s ume r"
of Chap ter 1 , Learning to B e a Be tter Buyer . Define thes e
four main techniques used by adver t i s er s :
Conformi ty ,
t e s t imon ial , sugge s tion , and int e l l e c tual appeal .
After
def ining the s e terms , watch TV and find at least two
Some adver t i s ement s
examp l e s of each type of adver t i s ement .
may combine two technique s - - c onformity and sugg e s t ion are
F o r each examp l e that y o u give , tell the
often combin e d .
brand name of the product and give the key words or s l ogan
of the a d .
T e l l whether you think thi s is a goo d , effec tive
adver t i s ement or no t .
Try to exp lain what make s it effec­
Pay particular at tention to what i s
tive ( or ineffec tive ) .
not s a id or what information i s l eft out if the appeal i s
inte l l e c tual .
You will hand in to me a summary of your definitions and
examp l e s from TV .
You may u s e magazine adver t i s emen t s if
you prefer; if you use maga z ines , cut out and include the
· adver t i s emen t s with your analy s i s .
Ob j e ctive or goal I exp ect you to meet by doing thi s activity :
I expect you to l earn the definitions of the 4 main t echniques
of adver t i s emen ts .
I exp e c t you to be able to t e l l what type
of t e chnique is u s e d in a given adver t i s einent .
52
ACTIVITY ASS IGNMENT 9 .
LIFE INSURANCE
Direction s :
U s ing at l e a s t 3 different sourc e s , wri t e a
report on l if e insurance in which you :
1.
Des cribe the s e b a s ic typ es o f coverage :
term, endowment .
Who l e - l ife ,
2.
Give the c o s t per 1 , 0 0 0 of coverage for each type of
insurance f o r a p er s on at age 2 5 , 4 0 and · 5 0 .
3.
Tell why the c o s t o f the different typ e s o f insurance
T e l l why c o s t s of
differs for a pe r s on of the same age .
each insurance go up as a p erson g e t s o l der .
4.
From Sylvia Porter ' s Money Book or Consumer Repor t s ,
March 1 9 8 0 , " I s L ife Insurance a Good Inve s tment? " t e l l
why some expe r ts advi s e again s t buying who l e - l ife insuranc e .
T e l l what is meant by buying term and inve s t ing the differenc e .
Tel l what i s meant by l iving b ene f i t s and why many p eop l e
buy p o l i cie s that have l iving benef i t s .
5.
U s ing the family - s i tuat ion that you are r o l e - p l aying ,
tell what typ e of l ife insurance s eems b e s t for your family .
T e l l me how much l if e insurance you feel that the family
should buy and g ive the c o s t of· the insurance .
6.
You may want to contact a life insurance agent to obtain
more informa t ion in c omp l e t ing this a s s ignment .
However , do
not meet with the agent until you have done some background
reading or e l s e you will feel l o s t .
You will hand in to me a wr i t t en ( or typ ed) report summar i z ing
each of the above step s .
Give the sources of informa tion for
your r eport .
Obj ec t ive I exp e c t you to meet by doing this activity :
I expect you to be ab l e to define the three main typ e s of
l i fe insurance coverag e .
I exp e c t you to b e ab l e to tel l
why co s t s differ p er 1 , 0 0 0 of insurance at di fferent ages
and with different typ e s of coverag e .
I exp e c t you to be
I exp ect you to know
famil iar with life insurance t erms .
what is meant by l iving benefits or cash value .
I exp ect
you to know why some people advis e con sumers to buy term
insurance and inve s t the difference .
53
ACTIVITY A S S IGNMENT 1 0 .
CAR IN SURANCE
D irection s : Lo ca te at leas t 3 s ourc e s of informa t ion to
provide background informat ion on ca·r insurance .
Chpater 3
in A Con sumer ' s Guide to Insurance , and the p amphl e t on
Car Insurance p lu s Changing Times or C on sumer Repor t s coul d
all be s ourc e s .
L i s t 7 fac to r s that can influence the c o s t of car insuranc e .
Exp lain briefly the typ es of coverages offered by car
insurance and t e l l wha t protec tion is given with each type
From newspaper accoun t s o f acciden t s , de s cribe
of coverag e .
the s p e c ific damages that each type of coverage would pay
for .
In order to do thi s , det ermine which driver appears to
be at fault and a s sume each driver and the min imum l iab i l ity
coverage .
After you have done the above a s s ignment , apply your know­
ledge o f car insurance to your ro l e - s i tuation .
T e l l what
typ e s o f coverage you feel should be purchased for each car
Then go to or c a l l an insurance
in your fami ly s i tua tion .
agent and f ind out how much car insurance would co s t you .
Describe the c o s t for each type of coverage .
'( So many
dol lar s for c o l l i s ion and s o many for liab i l ity and s o on . )
D e s cribe the l imi t s or deductions of your insurance p l an .
Try to l i s t s everal ways that you can reduce the co s t s of
car insurance for your family .
U s e the c o s t s as you have
obtained them in your budget .
Obj ectives I exp e c t you to meet by do ing thi s a s s i gnment :
I expect you to l earn and be ab l e to apply the terms desc rip ­
tive of the different typ es of car insurance .
I expe c t you
to learn where you can locate information about car insurance
coverag e s and co s t s .
I exp ect you to l earn factors that
influence the c o s t of car insuranc e .
I exp ect you to l earn
how much various typ e s of car insurance coverage would c o s t
your family r o l e s i tua tion .
I exp e c t you t o b e ab l e t o l i s t
s everal way s to cut tho s e c o s t s .
54
ACT IVITY ASSIGNMENT 1 1 .
CREDIT APPLICATION
Direction s :
Obtain a credit appl ication
gas s t a t ion or retail outlet ( Sear s , for
· the credit app l ica tion u s ing information
After you have comp l e t e d the
s i tuation .
review the a s s ignment .
form from a bank ,
examp l e ) .
F il l in
from your role­
credit app l ication ,
Apply ing Concep t s on page B 7 5 in which you matched c ircled
items on the credit app l ica tion with the proper credit term
U s e the credit app l ica t ion
( character , capacity or capital ) .
which you have j u s t comp l eted and label each item that you
can match with the same credit terms ( character , cap i tal or
capac ity ) .
Not a l l items on the app l i ca t ion w ill b e l ab e led
a s some are general information i tems .
In other word s , look
over the app l ica tion and try to det ermine i f a spec ific item
i s a sking you about your cap ital , character or capac ity and
the lab e l the item accordingly .
Obj e ctives I exp ec t you to
.I exp ect you to be ab l e to
I exp ect you to be ab l e to
app l i cation with the terms·
meet by doing this activity :
fill out a credit appl icat ion .
match various i t ems on a credit
of character , capital or capac ity .
55
ACTIVITY A S S IGNMENT 1 2 .
INVESTMENT PLANS
Direction s :
U s ing the money that you · have managed to save in
your rol e - s ituat ion , create an inves tment p l an_ which will
. meet your needs and wants .
In order to do this , .first deter­
mine how much money that you want to inve s t .
Then dec ide on
how long you want to inve s t ( determine the amount of l iquidity
you desire in your inves tment p l an ) .
Then determine how much
r i sh that you feel f i t s your needs , wants and s i tuat ion .
Locate s everal sources of information that describe inves tment
option s that seem b e s t ab l e to meet your s i tuation .
You might
use Sylvia Porter ' s Money Book and art icles in Changing Times
or Consumer Reports or p amphlets from New York S tock Exchange .
You may want to call or vis it a s tock brokerage f irm to locate.
more informat ion .
After you have obtained as much informa tio!l
as you feel is nee ded , read the material and dec ide on an
inves tment p l an .
You are free to do in this s imulat ion what ­
ever you want to do - -- i f you want to buy s t o ck , you can do
that .
If you want to put your money into s ome savings p lan ,
you can do that . ·Wri te out your p lan in summary form and
meet with me and I will g ive you more directions a s to what
to do to carry out your p l an .
In your summary form , b e sure
to t e ll the amount you want to inve s t , the l iquidity and
the r isk that f i t s your desir es .
Ob j ec t ive s I expe ct you to meet by doing this activity :
I exp ec t you to learn where you can locate informa tion about
inve s tment s .
I expect you to be ab le to apply inves tment
terms of liquidity , r i sk , and safety to an inve s tment option .
I exp e c t you to l earn how to carry out an inve s tment plan
that you have electe d .
For tho se electing to buy stock , I
exp ect you to learn how to buy s t ock , and how to read and
interpret the daily s t ock market rep orts from the newspap er .
56
. ACTIVITY A S SIGNMENT 1 3 .
JOB WANT AD S/APPLICATION
U s e newspaper want advert i s ement s e c tion to f ind
D irection s :
informa tion to answer the s e que s t ions and accomp l ish the s e
tasks .
1.
Wha t typ e s o f j ob s are mo s t numerous
ment s ?
2.
in want adver t i s e ­
What s p e c ific j ob s adver t i s e d as you .now qual ified for?
3 . What typ e s o f j ob s adver t i s ed woul d your rol e - s ituation
in the budget s imulat ion be qualified for?
4.
S e l e c t 3 ads for j ob s that you are inter e sted ( e ither
your own pre s ent individual j ob inter e s t or tho s e that might
describe inter e s t s of your rol e - s i tuation ) .
Include thes e
ads in what you turn in to me .
a.
What train ing / qualificat ions are needed for this j ob ?
b.
What does thi s j ob pay?
c . . What are a dvancement opportunities in thi s j ob ?
d.
What does the Oc cup at ional Outlook Handbook have
to say about j ob opportunity in this field?
5 . Wr ite an app l icat ion for any one of the ads .
U s e your
Include a j ob
real s ituation or your role-play s i tuat ion .
r e sume in your app l ication .
Obj ective s I exp e c t you to meet by doing this as s ignmen t :
I exp e ct you to b ecome aware of the typ e s of j ob s adver t i s ed
in area newspap er s .
I exp ect you to b e ab l e to describe
train ing , pay and j ob oppor tunity outlook for three j ob s .
I exp ect you to b e ab l e to write a j ob app l icat ion which
includes a j ob resume .
57
ACTIVITY ASSIGNMENT 1 4 .
JOB HISTORY
Select 3 individual s that you can interview
Direction s :
.
about their j ob h i story .
One of ·the s e individual s mus t hold
the same j ob as you hold in the budget s imulation .
Of the
other two individual s you interview , only one may be a
I sugge s t that you interview someone
parent or a teacher .
who holds a j ob that you would l ike to someday have .
In
your j ob h is tory , s tart with . the p er s ons f i r s t j ob and con ­
t inue chrono logically to p resent .
Include the j ob hel d , the
training / qualifications neede d , the pay for the j ob , and the
reason le f t that j ob .
This interview will take some t ime
and wi ll ask the individual to tell some things about him­
s el f that some p eople might not want to talk about .
So b e
sure to exp la in what your purpose in doing this . i s and ask
them for their help and their t ime .
B e sure to thank them
for help ing you .
You will turn in t o me a summary of your findings for each
of the 3 individua l s .
It might b e eas ier f or you to make
up a chart to show your f indings .
As a conclusion , I want
you to try to exp l ain the relat ionship between j ob training
and qua lifications and typ e s of j ob s hel d and amount of pay
Try t o exp l a in why some j ob s pay more than other s .
receive d .
Try to exp l a in why people change j ob s .
Try to summarize
what you l earned from doing this activity in a paragraph or
two .
Obj ectives I exp e c t you to accomp l i sh in doing thi s activ i ty :
I exp e c t you to b e ab l e to summarize informa tion ob tained
from int erview about j ob s that p eople have hel d .
I exp ect
you to b e ab l e to make summary s tatements about the j ob held
and the p r e - reque s i t i e s needed in training / qual if icat ions in
compari son to j ob p ay .
I expe c t you to be ab le to give some
reason s why p eople change j ob s .
I hope that you will d i s ­
cover that many p e o p l e have held a variety of j ob s during
their lif e time .
58
ACTIVITY ASSIGNMENT 1 5 .
OCCUPATIONAL OUTLOOK HANDBOOK
Direction s :
U s e the Oc cupational Outlook Handbook l ocated
in the Guidance Office as a source of information .
1.
S e l e c t 3 j ob s that you are interested in pursuing as a
career .
U s e the Occupational Outlook Handbook to wr ite a
paragraph about each of the s e asp ects of each of your 3
p o tential occupation s .
a.
b.
c.
d.
e.
emp l oyment outlook
earnings and advancement
p l a c e s of emp l oyment
educational or expen s e qualifications
type of work
2.
Dec ide which o f the three j ob s you have summarized s eems
mo s t app eal ing to you and tell why thi s occupation is your
choice .
3.
Read the introduction of the Handbook and summarize i t s
conclusions concerning j ob s that have a g o o d out l lo"ok f o r j ob
op enings and tho s e that have a poor outlook for future j ob
opening s .
4.
Optional part of ac tivity - -not required and can b e done
without doing 1 - 3 above .
U s e your r o l e - s ituation in the
budget s imulation and the Handbook to discover occup ations
for which you might be qualified .
Res earch occupations in
the same or related fields .
You may elect to change your
In order to change j ob s , you shoul d :
occupat ion .
a.
b.
c.
d.
e.
discuss change with
b e prepared to meet
such is needed
be prepared to meet
b e prepared to meet
s e em s neces sary
show the s e exp ens e s
budget
family
educ ation/ training c o s t s i f
j ob s earch c o s t s
relocation c o s t s i f relocat ion
needed for j ob change on your
Obj e ctives I exp e c t you to meet by doing this activity :
I expect you to be ab l e to use the O ccupational Outlook
I exp e c t
Handbook to obtain information about o ccupations .
you to l earn about several a s p e c t s of tho se j ob s that have
a good outlook and j ob s that have a poor outlook f or j ob
opening s .
59
ACTIVITY ASS IGNMENT 1 6 .
FOOD 'MENU FOR WEEK
This i s a r equired part o f your budget s imulat ion .
Direct ions :
Prepare a food menu for your fami ly for one
week .
B e sure that your menu provides a nutritious and we l l ­
balanced die t .
You mus t show 3 mea l s a day for each family
member- - inc lude p or t ions for each meal .
You mus t purcha s e
all o f your f oo d unl e s s you are a farmer o r a homeowner with
a garden and a freezer .
(You mus t budget garden and freezer
exp en s e s if you e l e ct to provide part of your food from thi s
s ource . ) After you have prepared your food menu , prepare a
groc ery l i s t o f a l l items neede d .
G o to a groc ery s tore and
price each item .
Show th e s e prices on an item by item bas i s .
Total the individual prices to arrive at your food c o s t s
for one ·week .
Add 1 5 - 2 0 % t o allow for food p rice increase s ,
s tap l e s not on your l i s t , and additional variety in your
menu .
Add to this total an amount that res earch sugg e s t s i s
a reasonab l e amount for nonedib l e exp enditures at a grocery
s tore that are usua l ly included in food expens e s .
E i ther
add this amoun t to your food exp ens e or include it in your
budget in a s eparate category .
Mul tiply the grand total ( weekly total + 1 5 - 2 0 % + nonedib l e
"food" expen s e s ) times 4 to arrive a t a monthly food budget
expens e .
Show this total on your family food budget .
Rememb er that this total is food at home only .
60
ACTIVITY A S S IGNMENT 1 7 .
GROCERY ·sTORE COMPARISON
Direction s :
You ll)ay work with another family or two to
comp l ete this act ivity .
U s e the attached grocery l i s t as
a guide t o compare f ood prices in a t least 3 stores on at
leas t two different o ccasions .
You may make chang es in or
additions to the a ttached food l i s t , but do not e l iminate
entirely any one food type .
B e sure that your price compari­
sons are comparing equal amount s . You may have to make
change s in brand names as some s t ore s may not have the given
bran d .
Make sure that your price compari sons on at leas t
Do not make two
two occas ions a r e at least one week apart .
The groc ery
trips to make comp ar i s ons in the same week .
week in O thello " s tart s " on Thur s day with the adver t i s emen t s
in the O thello Outlook .
After you have comp l e t e d your price
l i s t s write a summary in which you attemp t to artalyze the
Sugge s t e d ana ly s i s might include items
price compar i s ons .
like the s e :
1.
In what ways are the prices the same ?
2.
On what items was there sign ificant price differences?
3.
Was any one s t ore con s i s tently l e s s exp ens ive for mo s t
i t ems ? Was any one s t o r e l e s s exp ensive for mos t items in
any f ood group?
4.
S e l e c t a few items where price differences among the
s tores or between the t ime s you checked p rices were the
grea t e s t and talk to the s tore manager to l earn why this
difference exi s t e d .
5.
Conclude your comp ar i s on in a p aragraph or two .
Obj e ctives I exp e c t you to meet by doing this activity :
I
expect you to be ab l e to comp are food prices on s elected
items in 3 stores in O thello ( one s tore might b e out of town . )
I expe c t you to b e ab l e to make summary statements about the
r e sul t s of your f o o d comparison s .
I exp ect you to be ab l e t o
exp lain why a few s e l e c t e d items var ied in their pric e s .
61
Form 2A
INFLAT ION SURVEY
PRICE CHECKLIST
Name-----Store------��--Locat ion
·�-----
Direction s :
Wr ite the price and the uni t price for the
following items on the dates agreed to in c l a s s .
ITEM
1 . Whol e fryers ( per lb . )
2 . Fresh gr ound beef ( lb . )
3 . Rib s te ak ( lb . )
4 . Darigo l d butter ( lb . )
5 . Kraft s l iced chees e ,
Amer ican ( 1 2 o z . pkg . )
6 . One doze egges
( grade AA larg e )
7 . Potatoes ( 10 lbs . )
8 . Fresh carro t s ( p er lb . )
9 . Banana s , Chiquita
brand ( 1 lb . f
1 0 . Kell ogg ' s Corn Fl akes
( 1 2 o z . pkg . )
1 1 . Kidney beans , Gol den
Grain Brand ( 1 lb . )
1 2 . Bumbl eb ee Tuna
( 6 - 1 / 2 ozs . )
1 3 . Maxwel l House Coff ee ,
regular grind ( 1 lb . )
1 4 . Wonder Bread
( one pound loaf )
1 5 . Coca C o l a
( 1 6 ounce bott l e )
1 6 . B irdseye Fro zen Corn
( 1 0 ounc e )
1 7 . C & H Sugar
( one pound)
Check Il l
Date : ---
Check 11 2
Date : ---
Check 11 3
Da te : ---
62
ACTIVITY ASS IGNMENT 1 8 .
COSTS PER MILE OF DRIVING CAR
Direc t ion s :
U s e art i c l e s in Consumer Repor t s o r Changing
Times to provide information with which you can calculate
the price per mile o f driving your car .
Show the c o s t s for
each category of auto expen s e .
Use the c o s t p er mile
f igure to help you in your budget s imulation . Adj u s t tho s e
c o s t s g iven in your s ource to. f i t your s i tuat ion .
Show tho s e
adj us tment s item by item and exp l ain why you added o r sub­
Try to det ermine an average monthly
tracted in each i t em .
expen s e for your car .
Show thi s in your budget s imulat ion .
Explain how you could reduce the s e c o s t s per mi l e .
Obj ectives I exp e c t you to meet in doing thi s ac.tivity :
I exp ect you to l e arn wher e to f ind information about the
c o s t of driving your car .
I exp e c t you to l earn the various
typ es of expen s e s that are involved in own ing a car .
I
exp ect you to learn the approximate c o s t p er mile of driving
a car in the s ame c l a s s as your s .
I exp ect you to b e ab l e
to det ermine the monthly c o s t s of a given car .
63
ACTIVITY A S S IGNNENT 1 9 .
COSTS OF ENTERTAINMENT
Direct ion s : U s e your family -role s ituation to determine how
much your entertainment c o s t s per month would b e if you
Make a l i s t of entertainment op tion s
"went out " once a week .
you are l ikely to con s i der and then p rice each occasion .
Do no t gue s s a t the p ric e s - - go out and actual ly price thing s .
Op t ions might include ac t ivities l ike :
1.
dinner
2.
go to a show
3.
at tend sport s event
4.
attend l ocal theatre p resentation
5.
week-end campin g trip
Try to include all c o s t s for each op t ion you cons ider .
Dec ide if the s e weekly expenditures wo"l,lld f i t your family ' s
des ired and income abil i ties .
You may dec ide to cons ider
to erh enterta inment opt ions at home .
You may decide to go
out more or l e s s o f ten .
Summarize your family ' s dec is ion
conc erning entertainment op t ions for an average month .
Then
show on your budget s imulat ion entertainment c o s t s to refelct
that family decision .
Obj ective s I exp ect you to meet by doing this ac tivity :
I exp e ct you to learn how much it would c o s t your family role
s ituation for various entertainment options .
I exp ect you to
a
family
de
c
i
s
ion
which
will
allow
you
to
be ab le to
make
budget entertainemnt c o s t s to fit your needs and ab ilities .
.64
ACTIVITY A S S IGNMENT 2 0 .
Direct ions :
1.
2.
SELECTING
AN
APARTMENT
U s e your family role s i tuation to dec ide :
What are your ap.artment needs?
How much can you afford to pay for rent?
S e l e c t 2 or 3 apartmen t s advertised in the newspaper that
appear to me e t your needs and. inc ome ab ility a s you have
des crib e d above .
C a l l the landlord and s chedule a t ime to
see the apar tment .
Compare the two apartment s to determine
Make up a checkl i s t or chart
which s eems b etter for you .
to compare the apartment in terms of :
S i ze
II of bedrooms
floor p l an
furnished
app l ianc e s - condit ion
locat ion
neighbors
s ecur i ty / safety
cons truc tion
insulation
heat ing c o s t s '"
landlord reputation
water - s ewer-garbage
damage dep o s i t
parking - off s treet?
plumb ing
grounds
extras
other con s i derations
*The local gas or elec tric c ompany may be wil l ing to give you
the heat ing c o s t s from l a s t year · on that apartment .
Tel l which apartment you would choos e .
Exp lain why .
U s e this informat i on in your budget s ilJlu lation .
Obj ec t ives I exp e c t you to meet by do ing this activity :
I expe ct you to be ab l e to determine your hous ing needs , read
the newspaper to det ermine what is ava ilab l e to meet tho s e
nee ds , and to compare two apartments to det ermine which b e s t
f i t s your s i tuation .
I exp ect you to be ab l e to t e l l how
much apartment and util ities would c o s t your family in the
s imulation .
65
KEY ECONOMIC CONCEPTS THAT S IMULATION. HELP S TO TEACH
Needs
Wan t s
Gro s s income
Net inc ome
Opportunity c o s t
Saving and s avings p l ans
Inves tment and inve s tment p l an s
Budg e t s and budget pro ces s
Assets
Liab i l ii t e s
N e t Worth
Credit
. Credit App l ication- - charac ter , capacity , and capital as
related to app l icat ion
F ixed exp en s e
F l exib l e expense
L iquidity , r e turn , safety as related to savings accoun t s
Budget c o s t s o f s p e c ific i t ems
Car insurance
Life insurance
Transportation c o s t s
Food costs
Housing c o s t
C o l l ege education c o s t s
C l o th ing c o s t s
Job h i s tory
Job app l icat ion
Job . r e sume
Occupat ional outlook for specif i c occupations
66
P RE-TEST FOR BUDGET S IMULATION
( Mul t ip l e - choice are 2 p oints each 2 5 x 2
=
5 0 p o int s )
1.
A p e r s on ' s p ay minus taxes and other deduc tions .
c.
discret ionary
a.
gr o s s income
b.
net income
· inc ome
d.
Engel ' s income
2.
A l i s t: o f i t ems that you want in the order · of their
imp ortance is called a
list of
c.
opportunity l i s t
a . groc ery l i s t
b.
priorities
d . util ity order
3.
The average family spends
income on foo d .
a.
00 -10
b.
20-30
c.
% of their after - t ax
30-40
d.
1 % rule
4.
When budget ing , you should try to keep your MONTHLY
housing c o s t s equal to
a.
1 p er cent o f your take-home pay
b.
one weeks take-home pay
c . . l e s s than 2 and 1 / 2 times your · annual inc ome
d.
savings p lus investment
5.
The average family spends -------% p f their aftertax income on cl othing and p ersonal car e .
a.
35
5
b.
15
c.
25
d.
6.
If you wanted to get a l oan to buy a car , you would
probably go to a
a.
commercial bank
b.
savings an d l o an b ank
c.
U S Savings Bond B ank
d.
a l l o f the s e
7.
Things that you own of value are called
a . assets
b . l iab ilities
c . needs
d.
8.
In terms of credit app l ication , ques t ions about how · long
you held a j ob and how long you l ived in your l a s t
r e s i dence would refer to your
a . char ac ter
b . cap acity
c . capital
d . assets
9.
In terms o f credi t app l icat ion , que s t ions about your
occupat ion or numb er of dependen t s would refer to
a . charac ter
b . capac ity
d . liab i l i t i es
c . capital
10 .
An
is
a.
b.
c.
d.
cap i t a l goods
exp ens e which varies in its am0Ul1 t and when it is p ai d
called
fixed expen s e
f l exib le exp ens e
opp ortun ity c o s t
none o f the s e
67
11 .
Payment for the u s e of money i s called
d . savings
a . rent
b . inter e s t
c . divident
12.
The re turn on inve s tment for a share of s tock b e ing he l d
i s called
c . dividend
a . intere s t
b . compound
d . savings
14.
C o s t exp r e s s ed a s l o s t opt ion s , a s option s not taken , or
in terms of what you had to give up in order to buy
s omething , i s called
a. opportunity c o s t s
b . a s s et s
c . f ixed c o s t s
d . f l ex ib l e co s t s
15 .
Many p eop le do not try t o budget b ecau s e
a . they f e e l i t takes t o o much t ime
b . they feel i t can l ead to family disputes
c . they feel they don ' t have enough money t0 budg et
d . a l l of the s e
16 .
Applying oppor tunity c o s t s t o your own ec onomic dec i s ions
i s a matter o f deciding which purchase will
a . c o s t the l e a s t
b . s a t i sfy you the mo s t
c . l a s t the longe s t
d . take the l e a s t t ime for you t o have opportunity t o
purcha se
17.
An
on
a.
b.
c.
d.
18 .
When you put money in the bank
a . your cash i s s tored in a vault until you need i t
b . your dep o s i t i s sent t o the F ederal Re s erve B ank
c . your dep o s i t i s u s e d to make loan s and inve s tments
d . the b ank char ges you rent for s toring your money
19 .
Int ere s t figured on the princip l e . and the inter e s t that
p r incip l e has alr eady earned is called
a . compound intere s t
b . s imp l e interes t
c . periodic inter e s t
d . dividend intere s t
20 .
Checking account s are now among the servic e s offered by
a . mutual savings banks
b . commercial banks
c . s avings and loan banks
d . a l l of the s e
·
exp en s e which i s a specific amount and must b e p a i d
a definite date is a
flexib l e exp en s e
f ixed expen s e
p eriodic exp en s e
budget exp ens e
68
21 .
If a saver wil l n o t need his savings for a reasonably
long period , he would consider
a . a credit union share
b . a pa s sbook account
c . S er i e s EE Saving s Bond
d . a t ime dep o s it
22 .
Intere s t accumulates fas ter if i t is compounded
a . daily
b . monthly
c . quarterly
d . annual ly
23 .
In
he
a.
b.
c.
d.
savings acc ount s , one generally gains int ere s t as
g ives up
l iquidity
safety
r eturn
s tab i l i ty of value
�������-
24 .
What protects the safety of your dep osit in many
commercial bank s ?
a. CPI
c . F ICA
d . FDIC
b . F SLIC
25 .
want s and
r e s ourc e s
results i n sarcity .
a . l imi te d wan t s and l imited r e s ources
b . unlimi te d wants and l imi t e d re sources
c . unlimited wan t s and unl imit ed resources
d. l imited wan ts and unl imited r e s ources
ANSWER EACH QUESTION USING SPACE PROVIDED AS
SHORT AN SWER .
KEY TO LENGTH OF EXPECTED ANSWER . ( 5 p oints each 1 0 x 5
5 0 p o int s )
.
=
1.
L i s t the s teps involved in s e t t ing up a budge t .
2.
G ive 4 different deduc tions that could b e taken out one ' s
gro s s income to arrive at net income .
3.
What i s the opportunity c o s t of maintaining a min imum b alance
of 1 , 0 0 0 dol l ar s in order to avoid a s ervice charge for a
checking account ?
69
4.
How exp ens ive a home coul d you afford to buy with an
annual income o f 18 , 0 0 0 do l l ar s ?
Give rule that app l ie s .
Show work .
5.
Tell what if anything provided s afety for money p laced
in each o f the s e
6.
a.
credit union
b.
Savings and Loan B ank
c.
Ser i e s E E Bond
d.
t ime dep o s it
In s entence form,
exp lain the l iquidity of each of the s e :
a.
credit union
b.
Series EE Bonds
c.
time dep o s i t s
d.
counne rcial bank - p a s sbook account
7.
L i s t 3 bene f i t s and 3 c o s t s of a budge t .
8.
L i s t 2 advantages and 2 disadvantages of renting an
apar tment ins t ead of buying a home .
70
9.
The Smith family have
They rent a 3 bedroom
i s making p aymen ts o f
gro s s income i s 1 , 8 0 0
a.
b.
c.
2 daught er s aged 3 and 4 year s .
furnished apartment .
Mr Smith
1 8 0 a month on a car .
The Smith ' s
a month .
U s e thi s informat ion t o
Determine the Smith ' s net income .
.
Make a l i s t of po s s ib l e budget categories or expenses
for the Smith famil y .
Make an educated gue s s at how much money the Smith ' s
should budget for each of the p o s s ib l e budget categories
or expen s e s .
Answer 1 o f the f o l l owing 3 que s tions .
Do only 1 of the 3 .
L i s t 4 main techniques of advert i s ements and give 1 examp l e
of each technique us ing p r e s ent T V a d s as your s ource .
Give the approximate c o s t of c o l l ege in terms
of tui tion and
f e e s , room and board for any 2 named college s .
L is t and br iefly des cribe the 3 maj or typ es o f life insurance .
T e l l why the c o s t o f insurance varies acc or ding to the typ e
of p o l icy and the ag e of the in sured .
L i s t 4 type s of information obtaine d . in the Occupational
Outlook Handbook .
71
P O STTEST FOR S IMULAT ION
BUDGET S , SAVING AND INVE STING
Chap te r s 1 & 2 , Managing Your Money and Credit
1.
A person ' s pay minus taxes and other deductions
a . gro s s income
b . net income
c . dis cret ionary income
b . Engel ' s income
2.
A l i s t of items you want in the order of their importance
c . priorities
a . grocery l i s t
c . oppor tunity l i s t
d . util ity order income
3.
The average family s p ends
income on fo o d .
a. 0 0-10
b . 20-30
c. 30-40
% of their after - t ax
----
d . 1 % rule
4.
When budgeting , you should try to keep your MONTHLY
hous ing c o s t s equal to
. a . 1 p er cent of your take-home pay
b . one weeks take-home pay
c . l e s s than 2 and 1 / 2 times your annual inc ome
d . saving s p lu s inves tment
5.
% of their after - t ax
The average family spends
income on clothing and p e r s onal care .
a. 5%
b . 15%
c . 25%
d. 35%
6.
If
to
a.
c.
7.
A maj or advan tage o f thi s form o f busin e s s in i t s
l im� ted l iab il ity
a . corporat ion
b . proprietor ship
c . partnership
d. none o f thes e
8.
A maj or a dvantag e of thi s form i s that the owner i s ·his
own bo s s and doe s not have to s p l i t pro f i t s with other
owners .
a . corporat ion
b . proprieter ship
c . partner s hip
d . none of the s e
9.
A maj or disadvantage of this form o f bus ine s s i s i t s
short l ength of life due to di s agreemen t s and f ights
among the owner s .
a . corporat ion
b . proprietor ship
c . partnership
d . none o f the s e
10 .
An
is
a.
d.
you wanted to get a l oan to buy a car , you would go
a
commer cial bank
b . savings and loan bank
U S Saving s Bond Bank
c . a l l of the s e
exp ern> e which va ries in i t s amount and when it is paid
called
f ixed expense
b . f l exib l e exp ense
c . opportunity c o s t·
none o f the s e
72
11 .
P ayment o f the u s e o f money is c a l l e d
a . rent
b . inter e s t
c . dividend
d.
12.
The r eturn on .inve s tment for a share of s tock b e ing held
i s called
d . savings
c . dividend
b . compound
a . inter e s t
13 .
a.
s imp l e
s aving s
is alway s f igur ed on the princ ipl e alone .
b . compound
c . dividend
d . s avings
14 .
C o s t expr e s sed as l o s t option s , as op tions not taken ,
i s called
c . fixed c o s t s
a.
opportunity c o s t s
b . a s s et s
d . f l ex ib l e c o s t s
15 .
Many p eople do n o t try to budget b ecause
a . i t takes time
b . it can lead to family disputes
c . they f eel they don ' t have enough money to budget
d . all of the s e reason s
16 .
People l ive on many different leve l s according to their
a . age and sex
b . income and exp en s e s
c . j ob s and o ccupations
d . al l o f the s e
17 .
A p ayment received by a c l a s sp er s on based on the values
o f his s a l e s
a . profit
b . commi s s ion
c . sal ary
d . GNP
18 .
App ly ing opp ortunity c o s t s to your own economic .decis ions
is a matter of de ci ding which purchases will
a . c o s t the l e a s t
b . s a ti s fy the mo s t
c . ful f i l l the
b a s ic needs
19 .
An
on
a.
c.
20 .
When you put money in the b ank
a . your cash i s s tored in a vaul t · until you need it
b . your dep o s i t is sent to the Federal Res erve B ank
c . your dep o s it i s used to make l o ans and inve s tments
d . the bank charges you rent for s toring your money
21 .
Interest figured on the princ ip l e and the inter e s t that
princ ip le has already earned is called
b . s imp l e inter e s t
a . c ompound inter e s t
d . dividend inter e s t
c . p eriodic inter e s t
22.
Checking accounts are now among the "Services offered by
a . mutual s avings banks
b . commerical banks
c . s avings and loan banks
d . al l of these
expen s e which is a specific amount and mus t b e paid
a definite date is called
f l exib le exp en s e
b . fixed exp en s e
p eriodic exp en se
d . budget exp en s e
73
23 .
If a saver wi l l not need his savings for a. reas onably
long p eriod , he should cons ider
a . a credit union share
b . p as sbook account
. d . t ime dep o s i t
c . Series EE Bond
24 .
Bonds is sued b y stat e s , countie s and c i t i e·s are called
b . municipal bonds
a . g overnment bonds
d . all of the s e
c . corporate bonds
25 .
Interest accumulates fas ter if it is compounded
d . annually
b . monthly c . quarterly
a . daily
26.
·A p e r s on who has bought a bond i s a ( an )
a . creditor
b . debtor
c . ovmer
27 .
A p e r s on who has bought s tock is cal led a ( an )
a . creditor
b . debtor
c . ovmer
28 .
In s avings accounts , one generally gains int erest as
he gives up_
----��
a . l iquidity �c . return d . s tab ility of va i ue
b . safety
29 .
What pro t e s t your safety in many commercial bank s ?
a . CPI
b . F SLIC
c . FDIC
d . F ICA
30.
---- -- -refers to ab i l i ty to quickly tran s fer
� without any p enal ty .
a s s e t s t o cash
a . safety
b . l iquidity
c . retµrn
d . s tab il ity
31 .
Accor ding to Engel ' s l aw , as inc ome goes up the % spent
on needs would
a . go up
b . go down
c . vary on level of inc ome
d . s tay the s ame
32.
Which o f the f o l lowing is a l egal entity and i s given a
l if e o f i t s O'\vn with ab ility to sue and b e sued
a . proprietor ship
b . partnership
c . corporation
33 .
34 .
a.
b.
c.
d.
want s and
resourc e s r esul t s in scarc ity .
l imited want s , l imi ted resources
unl imited wan t s , l imi ted re sources
unl imi te d want s , un limi ted r e s ourc e s
l imited wan ts , unlimited resources
According to examp l e of E l l en in book and the examp le
I gave you in l e c ture , one may reas onab ly exp ect to l o s e
o f their gro s s income .
a . 1/2
b. 1/3
c . 2 and 1 / 2 t imes
c . 1 % rule
SHORT ANSWER
1.
( 3 0 p o ints to tal )
L i s t the s tep s I gave you in l e c ture for making a budget .
( 3 p o ints )
74
2.
G ive 4 different deduction s that coul d b e taken out of
one '·s gr o s s income to arrive at net income . ( 3 p o int s ) .
3.
According to devices I gave you in l e ctur e , how much would
a $5 0 , 0 0 0 house c o s t you in monthly payments with a $10 , 0 0 0
. down p ayment?
( G ive rule". Show your work) ( 2 p o int s )
4.
How exp ensive a home coul d you afford t o buy with an annual
inc ome of $ 1 8 , 0 0 0 ?
( G ive rul e . Show work ) (·2 p o int s )
5.
Tell wha t if any thing provides saf ety to money p l aced
in each o f the s e :
(3 p o int s )
a . credit union
b.
saving s and loan bank
c . Series EE B ank
d . t ime dep o s i t
6 . In sentence form , exp lain the l iquidity of each o f the s e :
( 4 p o int s )
a . credit union
b . Series EE B onds
c . t ime dep o s i t s
d . commercial bank-p as sbook ac count
7.
L i s t the three typ e s of busines s organization s and give
an advantage for each typ e . ( 3 p o int s )
EDUCATIONAL TECHNOLOGY CE:.N I t:H
CENTRAL WASHINGTON UNIVERSITY
75
8.
Rank the s e from the lowe s t to the high e s t in terms of
inter e s t you would exp ect to gain . ( 3 p o int s )
a.
b.
c.
d.
e.
9.
10 .
s avings in credit union
time dep o s i t
commer cial bank
Series EE B onds
s avings in Savings and Loan
Comp are the three typ es of b onds in highe s t terms of r i sk
and r eturn .
( 3 p o int s )
THE FOLLOWING QUE ST IONS REFER TO THIS REPRINT FROM THE
DAILY NEWSPAPER STOCK MARlZET REPORT .
( 4 p o int s )
ACF Ind 1 . 9 0
a.
PE
7
Sales
93
High
33 1 / 2
Chg
Low
Last
3 3 1 / 8 3 3 1 / 11 - 3 / 8
·
· Give the numb ers that refer to the amount of money
that s tockhol ders received from each share of thi s
s t o ck l a s t quar t e r .
b.
How does thi s s tock ' s r e turn l a s t year compare with
money put in a commerc ial bank ' s p a s sbook s avings
account ( t ell what you u s e d to compar e ) .
c.
\\That was the c l o s ing price of this s tock on the
DAY BEFORE THI S DAYS REPORT .
d.
If you owned thi s s t ock , would you be happy or unhappy
with this report? Exp l ain your s ource of j oy or
s orrow- -why would you be happy or unhappy?
·