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Economics Framework for the 2006 National Assessment of

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Economics Framework for the 2006 National Assessment of

The National Assessment Governing Board

    The National Assessment Governing Board (NAGB) was created by Congress to formulate policy for the National Assessment of Educational Progress (NAEP). Among the Board’s responsibilities are developing objectives and test specifications, and designing the

    assessment methodology for NAEP.

    Members

    Darvin M. Winick, Chair President Winick & Associates Dickinson, Texas

    Economics Framework for the 2006 National

    Assessment of Educational Progress

    Developed Under Contract Number ED01CO0130 for the National Assessment Governing Board by the American Institutes for Research, the National Council on Economic Education, and the Council of Chief State School Officers

The National Assessment Governing Board

    The National Assessment Governing Board (NAGB) was created by Congress to formulate policy for the National Assessment of Educational Progress (NAEP). Among the Board’s responsibilities are developing objectives and test specifications, and designing the assessment methodology for NAEP.

Members

    Darvin M. Winick, Chair Honorable Dwight Evans John H. Stevens President Member Executive Director Winick & Associates Pennsylvania House of Texas Business and Education Dickinson, Texas Representatives Coalition Philadelphia, Pennsylvania Austin, Texas Sheila M. Ford, Vice Chair Former Principal Horace David W. Gordon Mary Frances Taymans Mann Elementary School Sacramento County Executive Director Washington, D.C. Superintendent of Schools National Catholic Educational Sacramento County Office of Association Francie Alexander Education Washington, D.C. Chief Academic Officer, Scholastic, Sacramento, California Inc. Oscar A. Troncoso Senior Vice President, Scholastic Kathi M. King Principal Education Twelfth-Grade Teacher Socorro High School New York, New York Messalonskee High School Socorro Independent School District Oakland, Maine El Paso, Texas David J. Alukonis Chairman Honorable Keith King Honorable Thomas J. Vilsack Hudson School Board Member Governor of Iowa Hudson, New Hampshire Colorado House of Representatives Des Moines, Iowa Colorado Springs, Colorado Amanda P. Avallone Michael E. Ward Assistant Principal and Kim Kozbial-Hess Former State Superintendent of Eighth-Grade Teacher Summit Fourth-Grade Teacher Public Instruction Middle School Fall-Meyer Elementary School North Carolina Public Schools Boulder, Colorado Toledo, Ohio Jackson, Mississippi Honorable Jeb Bush Andrew C. Porter Eileen L. Weiser Governor of Florida Director, Learning Sciences Institute Member, State Board of Education Tallahassee, Florida Peabody Institute Michigan Department of Education Vanderbilt University Lansing, Michigan Barbara Byrd-Bennett Nashville, Tennessee Chief Executive Officer Grover (Russ) Whitehurst (Ex Cleveland Municipal School District Luis A. Ramos Officio) Cleveland, Ohio Community Relations Manager Director PPL Susquehanna Carl A. Cohn Institute of Education Sciences Berwick, Pennsylvania Superintendent U.S. Department of Education San Diego City Schools Mark D. Reckase Washington, D.C. San Diego, California Professor Measurement and Charles E. Smith Quantitative Methods Shirley V. Dickson Executive Director NAGB Michigan State University Educational Consultant Washington, D.C. East Lansing, Michigan Laguna Niguel, California

    John Q. Easton Executive Director Consortium on Chicago School Research Chicago, Illinois

Economics Framework

    for the 2006

    National Assessment of Educational Progress

    Developed Under Contract Number ED01CO0130 for the National Assessment Governing Board by the American Institutes for Research, the National Council on Economic Education, and the Council of Chief

    State School Officers

    National Assessment Governing Board

    Darvin Winick

    Chair

    Sheila M. Ford

    Vice Chair

    Charles Smith

    Executive Director

    Sharif Shakrani

    Deputy Executive Director

    Mary Crovo

    Project Officer

    Economics Project

    American Institutes for Research

    Stephen Klein

    Julia Mitchell

    National Council on Economic Education

    Claire Melican

    Vanderbilt University

    Stephen Buckles

    Council of Chief State School Officers

    Wayne Martin

    Economics Framework for the 2006 National Assessment of Educational

    Progress.

    Developed for the National Assessment Governing Board under contract

    number ED01CO0130 by the American Institutes for Research, the National

    Council on Economic Education, and the Council of Chief State School

    Officers.

    For further information, contact the National Assessment

    Governing Board: 800 North Capitol Street NW.

    Suite 825

    Washington, DC 20002

    www.nagb.org

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Table of Contents

    Executive Summary................................................................. v

    Chapter 1: Introduction .......................................................... 1

     What is the National Assessment of Educational

     Progress (NAEP)? ............................................................... 1

     Who is responsible for NAEP? .............................................. 1

     What kind of information does NAEP collect? ....................... 2

     How does NAEP collect this information? ............................. 2

     How are NAEP achievement results reported? ....................... 3

     What is the 2006 NAEP Economics Assessment? .................. 3

     What is the NAEP Economics Framework

     Development Project? ......................................................... 4

    Chapter 2: Economic Education ............................................. 7

    What is the current state of economic education in the United States?

     ..................................................................................... 7

    Chapter 3: Content ................................................................ 11

    The Market Economy ........................................................ 13

    The National Economy ...................................................... 22

    The International Economy ............................................... 30

    Chapter 4: Characteristics of the Assessment ...................... 33

    Cognitive Categories ......................................................... 33

    Contexts and Applications ................................................. 35

    Graphing, Table and Chart Interpretation, and Calculation

     Skills .......................................................................... 37

    Types of Items .................................................................. 38

    Economic Terminology ..................................................... 40

    Preliminary Descriptions of Achievement Levels .............. 42

    Appendix A: References ......................................................... 45

Appendix B: NAEP Economics Framework Project ................ 47

Appendix C: Steering Committee Charge to the Planning

    Committee ........................................................................ 52

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    Appendix D: Sample Items ..................................................... 57

    The Market Economy ........................................................ 58

    The National Economy ...................................................... 60

    The International Economy ............................................... 63

Appendix E: Framework Development Process ...................... 66

    Appendix F: Acknowledgments ............................................. 71

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Executive Summary

    he purpose of economic education is to enable individuals to

    function effectively both in their own personal lives and as

    citizens and participants in an increasingly connected world T

    economy. Both knowledge of economic concepts and ideas and the ability to apply basic economic analysis to solve everyday problems are necessary for an individual to function as a productive member of societyas a worker, a saver, an investor, a consumer, or an active citizen.

    This framework document provides a guide for the development of the 2006 National Assessment of Educational Progress (NAEP) Economics Assessment. The framework, together with Assessment and

    Item Specifications: NAEP 2006 Economics and Recommendations on

    Background Variables: NAEP 2006 Economics Assessment, makes

    explicit recommendations to the National Assessment Governing Board (NAGB) on the content and format of the assessment.

    This framework is designed to assess the outcomes of students’ education in and understanding of economics in grade 12 as part of NAEP. The framework is based on a definition of economic literacy as the ability to identify, analyze, and evaluate the consequences of individual decisions and public policy. Economic literacy includes an understanding of:

     the fundamental constraints imposed by limited resources, the

    resulting choices people have to make, and the tradeoffs they

    face;

     how economies and markets work and how people function

    within them;

     the benefits and costs of economic interaction and

    interdependence among people and nations.

    Economic literacy also includes having the skills that allow people to function effectively as consumers, producers, savers, investors, and responsible citizens. These skills include economic reasoning, problem solving, decisionmaking, and analyzing real-life situations.

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    The content of the framework is grouped for reporting purposes into three areasthe Market Economy, the National Economy, and the

    International Economy. The core ideas in the Market Economy content area, which comprises 45 percent of the assessment, are the relevance of limited resources, how buyers and sellers interact to create markets, how these markets allocate resources, and the economic role of government in a market economy. This category focuses on concepts such as scarcity, choice, opportunity costs, supply and demand, profit, competition, incentives, individual incomes, the comparison of benefits and costs in making decisions, and the evaluation of short- and long-run consequences of decisions.

    The National Economy content area (40 percent of the assessment) includes an understanding of the data that describe the overall conditions in the U.S. economy, the factors that cause changes in those conditions, and the appropriate policy alternatives. This category focuses on such concepts as unemployment, inflation, economic growth, money, gross domestic product (GDP), and the mechanics and the appropriate uses of monetary and fiscal policies.

    The International Economy content area (15 percent of the assessment) includes an understanding of the reasons for individuals and businesses to specialize and trade and the rationale for specialization and trade across international borders; an ability to compare the benefits and costs of that specialization and resulting trade for consumers, producers, and governments; and an understanding that this trade brings additional complications. This category includes concepts such as voluntary exchange, specialization, interdependence, imports and exports, barriers to trade, and the process and consequences of exchange rate determination.

    Assessing what students know and can do in economics offers an opportunity to measure their understanding and skills in a wide variety of important and daily events and problems. The NAEP Economics Assessment takes advantage of that opportunity by placing most of the assessment items in specific relevant and useful contexts and applications. Between 20 and 30 percent of the items will be written in each of three contextsan individual and household context, including

    decisions about earning, saving, and personal finance challenges; a business context with a focus on entrepreneurs, workers, producers, and investors; and a public context, including items related to government,

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    policy, citizenship, and domestic and international organizations. The NAEP Economics Assessment will include items that require students to use different cognitive skills to demonstrate their understanding of, and ability to use, economics. Students will be expected to demonstrate Knowing skills that use recognition and recall of fundamental ideas, Applying skills that use principles and concepts to solve real problems, and Reasoning skills that require a broad range of critical-thinking abilities. Approximately one-third of the assessment in each content area will be devoted to each cognitive category.

    The framework includes recommendations for the types of items to be used in the NAEP Economics Assessment. Students will spend approximately 60 percent of their time on multiple-choice items, 30 percent on short constructed-response items, and 10 percent on extended constructed-response items. All three types of items will be included in each of the three content areas.

    The framework uses the NAEP achievement level criteria of Basic, Proficient, and Advanced to describe what students should know and be able to do. Basic achievement is partial mastery of prerequisite knowledge and skills. The Proficient level represents solid academic performance. The Advanced level signifies superior performance. The Assessment and Item Specifications: NAEP 2006 Economics is a companion document to the Assessment Framework: 2006 National Assessment of Educational Progress in Economics. The specifications document translates the framework into guidelines for developing items and for developing the assessment as a whole. The primary purpose of the specifications document is to provide the National Center for Education Statistics (NCES) and its assessment development contractor with information that will ensure that the NAEP Economics Assessment reflects the intent of the NAEP Economics Framework adopted by the National Assessment Governing Board.

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Chapter 1

    Introduction

    What is the National Assessment of Educational Progress (NAEP)?

    Often called the ―Nation’s Report Card,‖ the National Assessment of

    Educational Progress (NAEP) is the only nationally representative, continuing assessment of what America’s students know and can do in various subject areas. NAEP provides a comprehensive measure of students’ learning at critical junctures in their school experience. As mandated by Congress in Public Law 107-279, the purpose of NAEP is to provide, in a timely manner, a fair and accurate measurement of student academic achievement and to report trends in such achievement. NAEP accomplishes these tasks by regularly assessing what students know and can do in various subject areas in grades 4, 8, and 12. Who is responsible for NAEP?

    NAEP has three components: policy, operations, and implementation. The National Assessment Governing Board (NAGB), whose members are appointed by the Secretary of Education, sets policy for NAEP. NAGB selects the subject areas to be assessed, develops assessment objectives and specifications, develops guidelines for reporting, and undertakes other policy duties. The National Center for Education Statistics (NCES), in turn, is responsible for overseeing NAEP operations. Implementation of the NAEP program is carried out through contracts, grants, and cooperative agreements with qualified organizations. These organizations are responsible for developing the assessment instruments, selecting the school and student samples, scoring student responses, analyzing the data, writing NAEP reports, and performing other NAEP tasks.

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