2009年 09月 03日 ( 3 )

Getting Schooled About Money

Getting Schooled About Money
Why personal finance is becoming as important as reading, writing, and arithmetic.

During her junior year of high school, Candice Backus's teacher handed her a worksheet and instructed the 17-year-old to map out (綿密に計画する) her future financial life. Backus pretended to buy a car, rent an apartment, and apply for a credit card. Then, she and her classmates played the "stock market game," investing the hypothetical earnings from their hypothetical (仮想の) jobs in the market in the fateful fall of 2008. "Our pretend investments crashed," Backus says, still horrified. "We felt what actual shareholders were feeling."

That pain of earning and losing money is a feeling that public schools increasingly want to teach. Forty states now offer some type of financial instruction at the elementary or high-school level, embedding (組み込む) lessons in balancing checkbooks and buying stock into math and social-studies classes. Though it's too early to measure the full impact of the Great Recession, anecdotally (ついでながらに言うと、逸話的には) the interest in personal-finance classes has risen since 2007 when subprime became a four-letter word (禁句) and bank failures a regular occurrence. Now, a handful of (一握りの) states including Missouri, Utah, and Tennessee require teenagers to take financial-literacy classes to graduate from high school. School districts such as Chicago are boosting their offerings in money-management classes for kids as young as elementary school, and roughly 300 colleges or universities now offer online personal-finance classes for incoming students. "These classes really say, 'This is how you live independently,' " says Ted Beck, president of National Endowment for Financial Education.

Rather than teach investment strategies or financial wizardry, these courses offer a back-to-the-basics (基本に立ち帰る) approach to handling money: Don't spend what you don't have. Put part of your monthly salary into a savings account, and invest in the stock market for the long-term rather than short-term gains. For Backus, this means dividing her earnings from her part-time job at a fast-food restaurant into separate envelopes for paying bills, spending, and saving. "Money is so hard to make but so easy to spend," she says one weekday after school. "That was the big takeaway."

Teaching kids about the value of cash certainly is one of the programs' goals, but teachers also want students to think hard about their finances long term. It's easy for teenagers to get riled up (神経を尖らせる、イライラさせる) about gas prices because many of them drive cars. But the hard part is urging them to put off the instant gratification (満足感) of buying a new T shirt or an iPod. "Investing and retirement aren't things teenagers are thinking about. For them, the future is this weekend," says Gayle Whitefield, a business and marketing teacher at Utah's Riverton High School.

Utah began its financial-literacy program when the state's personal bankruptcy rate shot up (急上昇する) five years ago. Now, in the midst of this Great Recession, Utah schools are expanding financial literacy offerings, so that kids in grades K-12 (幼稚園生~12年生まで) learn about financial planning, money management, savings, and investing. "The state's personal bankruptcy rate really woke people up," says Julie Felshaw, the financial- and economic-education specialist for the Utah State Department of Education. "Parents say they wish they'd had a class like this."

That's a big goal for these classes: preventing kids from making the same financial missteps (つまずき、誤り) their parents did when it comes to saving, spending, and debt. Though the personal savings rate has shot up to 4.2 percent as of July 2009, that's still a far distance from 1982, when Americans saved 11.2 percent of their incomes. It's hard for schools to teach strict money-management skills when teenagers go home and watch their parents rack up (ため込む、蓄積する) credit-card debt. It's like telling your kids not to smoke and then lighting up a cigarette in front of them, Beck says.

The other hiccups (ちょっとした問題) in this burgeoning field (急成長している分野) of financial literacy, ironically, are money and time. The New Jersey state legislature passed a bill in the spring of 2009 that mandated that six high schools run pilot programs (試験的プログラム) to teach students personal finance, but the state didn't allocate any cash for the program or develop a specific course. Instead, teachers are supposed to sandwich financial-literacy classes between math, reading, and test prep. "Schools are being told to put this into their curriculums when they already have so many things they have to incorporate into (~に組み込む) their day," Beck says.

Even with these challenges, students such as Backus say learning about money in school is worthwhile. After Backus finished her financial-literacy class, she opened up a savings account at her local bank and started to think more about how she and her family would pay for college. "She just has a better understanding of money and how it affects the world," says her mother, Darleen—and that's down to the minutiae of how money is spent at-large from taxes to bank bailouts (銀行救済) to the federal government's deficit (連邦政府の赤字額). All of this talk of money can make Backus worry, she says, but luckily, she feels prepared to face it.

by yu-fen-sun | 2009-09-03 21:52 | 英語関連
The Laws of Supply and Demand

Production decisions are made based on demand (需要) for goods and services. Supply of goods and services is dependent upon demand for the same. Why do movies that are much more popular stay at theaters longer than those that aren't as popular? Demand for the movie causes the theater operators to supply the showings that the consumer wants. Why does the room rate in a convention hotel go down on weekends? There is less demand on weekends because most convention-goers leave on Friday or Saturday and others don't arrive until Monday, so the supply of available rooms goes up. Hotel operators try to create more demand for their vacant weekend rooms by lowering prices and offering attractive amenities.

The law of demand states that during a specific time period the quantity of a product that is demanded is inversely (反比例して) related to its price, as long as other things remain constant. The higher the price, the lower the demand; the lower the price, the higher the demand. Don't confuse demand with wants. Consumers have unlimited wants, as was established at the beginning of this discussion. Nor are demands and wants the same as needs. A consumer may need to have a crown (歯冠) put on a tooth but may not want to have it done because of the high cost. At some point, the suffering patient may demand the services be provided regardless of the price.

Often when prices are too high and demand for a product or service lessens, it is because consumers have found a suitable substitute. Substitution happens all the time as a result of economic decisions that are made by consumers. For example, if someone needs a winter coat and likes one with a designer name and a price that reflects that name, the purchase may not be made. Instead, the person finds a similar coat that does not have a designer label and purchases it instead at a much lower cost.

Demand for goods or services determines the amount that will be supplied. The law of supply states that the greater the demand, the more that will be supplied; the lower the demand, the less that will be supplied. The amount that will be supplied by a producer of the good or service is based on capacity and willingness to supply the product at a specific price. A producer will not supply goods and services just because there is demand for them—price for the good or service is an important consideration.

If consumers are willing to pay more for a good or service, the producer will likely be willing to shift more resources in order to increase the supply of the demanded product. If a rancher (牧場の経営者) is raising prime beef cattle and there is high demand for this good and consumers are willing to pay more for high-quality beef, then the rancher might be willing to supply more even if it is necessary to shift resources or acquire additional resources to be able to do so.

Demands change, supplies change, and prices change. So how does a producer know how much is enough and what price to charge for the goods and services? Very simply, the demand for and supply of goods and services can be plotted on graphs using different prices. The supply and demand for a good or service intersect on the graph at what is called the equilibrium price, or the price where all of what is supplied will be demanded. If the price is belowe equilibrium, there will be a shortage of the good or service, and if the price is above equilibrium, there will be a surplus of the good or service.

by yu-fen-sun | 2009-09-03 00:41 | 英語関連
Economic Choice

Opportunity Cost.
When one makes economic decisions, it is because of limited resources. Alternatives must be considered. People make such decisions based on expecting greater benefits from one alternative than another. There is an opportunity cost involved in the choice. Opportunity cost is the benefit forgone (捨てる、差し控える) from the best alternative that is not selected: Individuals give up an opportunity to use or enjoy something in order to select something else.

Opportunity costs can't always be measured, because it might be satisfaction that is lost. At other times, however, opportunity cost can be measured. Here are examples of each. Perhaps a student is studying hard for a final examination in a difficult course because a good exam score is critical to achieve the desired grade. Friends call to invite the student out for the evening. The alternatives are to study or to have fun. Being wise, the student selects studying instead of going out. It is difficult to measure the opportunity cost of having fun with friends. In the second example, the same studying student is asked to help someone clean a garage. If the person offers to pay the student $50 to clean the garage and the student chooses to study, the opportunity cost is easily measured at $50. In both these examples, opportunity cost is directly related to what was given up, not any other benefits that might result from the decision.

Circumstances (状況、事情) also play a role in opportunity cost. Sometimes people are forced into a decision because of circumstances and the results may not always be optimal (最適な、最善な). For example, if someone is planning to relocate to a new city to start a new job and wants to sell a house before the move in order to be able to purchase a new house in the new location, the person may sell the house for less than the market price in order to complete the process. The opportunity cost is the value of what was given up in order to be able to purchase a new home. Every time a choice is made, opportunity costs are assumed.

Another economic choice that must be made is related to production. All four of the decisions must be made: What goods will be produced? How will production occur? How much should be produced? Who will be the recipients? All are decisions that influence production efficiency.

Efficiency is the primary element in deciding what to produce and how to go about (取りかかる) the production process. Efficiency is producing with the least amount of expense, effort, and waste, but not without cost. If you take something away from a person to satisfy another person, one will be less happy and the other will be more happy. If a way can be found to make one person more happy without making the other person less happy, this would be efficient.

An example of economic efficiency might be the following. Assume someone owns a car and a friend doesn't own a car but does drive. The friend needs transportation regularly for a week. It happens to be a time when the car owner will be away on a business trip and therefore won't be using the car. It makes no sense for the friend to buy a car to use for such a short period of time, so the owner loans the friend the car for that week. The car owner is no worse off and the friend is better off. Economic efficiency has occurred in this situation. If the car owner had not loaned the car to the friend, there would have been waste because the friend would have had to buy or rent a car. It is wasteful to fail to take advantage of opportunities in which there is no loss of satisfaction to either party.

Production efficiency (生産効率) is a situation in which it is not possible to produce any more units of a good without giving up the opportunity to produce another good unless a change occurs in available productive resources. If a farmer is growing wheat to be sold for the production of bread, there is a point at which adding additional fertilizer to the soil would do no good. If the fertilizer were used on an oat crop in a different field, production could be increased for that crop. The way to increase the wheat production is to find different resources to make the crop better, such as irrigating the land to provide more moisture.

In the above example, it was suggested that different or additional resources might be used to increase production. This is necessary only after efficiency has been achieved. Additional resources would have to come from land, labor, capital, or entrepreneurship. It is most common that capital will be used most often to increase production. Capital is productive input that is increased by people. This is known as investment. Investment involves giving up what might presently be consumed in favor of producing something to consume in the future. If the farmer wants to increase wheat production in the future, something will have to be given up now in order to increase the resources available for future production.

Increasing human capital is critical to increasing production. This does not mean that more people must be produced, but rather that the knowledge and skills of humans must be increased. This can happen because of improvements in technology and new ways of satisfying wants. This involves the entrepreneurial factor that was described previously—the human element that figures out ways to improve and expand the resources that already exist.

Product Distribution.
Getting goods into the hands of those who want them involves many choices. The economic system must decide how to divide the products that are produced among the potential recipients. Sometimes products can be divided equally among recipients, but normally this is not the situation. It must then be determined how the division will take place. In a capitalistic economic system, distribution is often determined by wealth. If two people have the same wants, the person who can most afford something will be able to acquire it.

opportunity cost (機会費用) の概念は、
by yu-fen-sun | 2009-09-03 00:22 | 英語関連