Economics

Category: Objective Test
Type: Individual

Overview

60-minute test administered during the NLC.

Objective Test Competencies: Basic Economic Concepts and Principles; Monetary and Fiscal Policy; Productivity; Macroeconomics; Market Structures; Investments and Interest Rates; Government Role; Types of Businesses/Economic Institutions; Business Cycles/Circular Flow; Supply & Demand; International Trade/Global Economics


Guidelines

Objective Test Guidelines
Objective Test Guidelines
  • No materials may be brought to the testing site.
  • Electronic devices must be turned off and out of sight.
  • No calculators may be brought into the testing site; calculators will be provided.
  • Bring a writing instrument.
General Guidelines

The general event guidelines below are applicable to all national competitive events. Please review and follow these guidelines when competing at the national level. When competing at the state level, check the state guidelines since they may differ.

Eligibility

  • Dues: Competitors must have paid FBLA national and state dues by 11:59 p.m. Eastern Time on March 1 of the current school year.
  • NLC Registration: Participants must be registered for the NLC and pay the national conference registration fee in order to participate in competitive events.
  • Deadlines: The state chair, or designee, must register each state competitor on the official online entry forms by 11:59 p.m. Eastern Time on the second Friday in May.
  • Each state may submit four (4) entries in all events except LifeSmarts, Virtual Business Finance Challenge, and Virtual Business Management Challenge.
  • Each competitor can only compete in one (1) individual/ team event and one (1) chapter event.
  • Each competitor must compete in all parts of an event for award eligibility.

Repeat Competitors

Competitors are not permitted to compete in an event more than once at the NLC unless one of the following circumstances applies:

  • Modified Events: A competitor may compete in the same event when the event is modified. Note, if the only modification is a name change, competitors may not compete in the renamed event.
  • Team Events: One (1) competitor of the team may have competed in the same event at one (1) previous NLC; however, they may not compete more than twice in the event at the national level.
  • Chapter Events: Competitors may compete in a chapter event more than once (American Enterprise Project, Community Service Project, and Partnership with Business Project).
  • Individual Entry: A competitor who competed as an individual entry in a team event at the national level may compete in the same event a second time as part of a team, but not a second time as an individual.
  • Parliamentary Procedure: Two (2) competitors of the team may have competed in this event at a previous NLC; however, they may not compete more than twice at the national level.
  • Pilot Event: Competition in a pilot event does not disqualify a competitor from competing in the same event if it becomes an official competitive event. The participant may compete in another event as well as a pilot event.

Breaking Ties

  • Objective Tests: Ties are broken by comparing the correct number of answers to the last 10 questions on the exam. If a tie remains, the competitor who completed the test in a shorter amount of time will place higher. If this does not break the tie, answers to the last 20 questions will be reviewed and determine the winner.
  • Objective and Production Tests: The production test scores will be used to break a tie.
  • Objective Tests and Performances: The objective test score will be used to break a tie based on the tie-breaking criteria of objective tests.
  • Reports/Projects and Performances: The report/project scores will be used to break a tie.
  • Performances: Judges must break ties and all judges’ decisions are final.

National Deadlines

  • State chair/adviser must register all competitors for NLC competitive events online by 11:59 p.m. Eastern Time on the second Friday in May.
  • All prejudged components (reports, websites, projects, statement of assurance) must be received by 11:59 p.m. Eastern Time on the second Friday in May.
  • All prejudged projects and reports must be submitted electronically.
  • All Statements of Assurance must be submitted online.
  • All production tests must be received at FBLA-PBL by 11:59 p.m. Eastern Time on the third Friday in May.
  • All production tests must be uploaded online.
  • State chair/adviser may make name changes only (no additional entries) by 11:59 p.m. Eastern Time on the first Friday in June. Competitor drops are the only changes allowed after this date and onsite.

National Awards

The number of competitors will determine the number of winners. The maximum number of winners for each competitive event is 10. Only one (1) award is given to the schools competing in chapter events (American Enterprise Project, Community Service Project, Local Chapter Annual Business Report, and Partnership with Business Project).

Additional Materials

Certain events may allow the use of additional materials. Please refer to event guidelines.

Americans with Disabilities Act (ADA)

FBLA‑PBL meets the criteria specified in the Americans with Disabilities Act for all participants who submit a special needs form.

Recording of Presentations

No unauthorized audio or video recording devices will be allowed in any competitive event. Participants in the performance events should be aware the national association reserves the right to record any performance for use in study or training materials.


Preparation

Sample Practice Materials

Format Guide

Competencies
Competency
Tasks
Basic Economic Concepts and Principles
1. Define money (characteristics, role, and forms) and trace how money and resources flow through the American economic system.
2. Utilize decision-making models to make economic choices and determine the opportunity cost of those choices.
3. Describe how trade-offs are made during the decision-making process.
4. Use basic economic concepts (such as supply and demand; production, distribution, and consumption; labor, wages, and capital; inflation and deflation; market economy and command economy) to compare and contrast local, regional, and national economics across time and at the present time.
5. Define the basic elements of capitalism.
6. Explain how, in a free enterprise system, individuals attempt to maximize their profits based on their role in the economy.
7. Define characteristics of a market system (e.g., profit, competitive markets, and private ownership of property).
8. Compare and contrast economic systems (e.g., traditional, market, command, and mixed) based on criteria such as freedom, efficiency, equity, security, employment, stability, and growth.
9. Analyze how economic systems, resources, and culture affect each other.
10. Analyze how a nation’s wealth and trade potential are tied to its resources.
11. Suggest what a nation or business should do if economic resources are underutilized.
12. . Identify the location of concentrations of selected natural resources and describe how their acquisition and distribution generates trade and shapes economic patterns.
13. Analyze the concepts of trade-offs and opportunity cost.
14. Evaluate the trade-offs of alternatives for solving societal problems according to economic goals (e.g., economic growth, equity, efficiency, security, employment, stability, and freedom).
15. Explain how the United States’ economy has changed from a rural to an industrial economy to a leader in the global economy.
16. Identify and explain various points of view concerning economic issues, such as taxation, unemployment, inflation, the national debt and distribution of income.
17. Describe how personal decisions can have a global impact on issues such as trade agreements, recycling, and conserving the environment.
18. Recommend what a nation or business could do to stimulate economic growth.
19. Define and explain economic scarcity as it applies to production, consumption, and exchange.
20. Ascertain why scarcity faces people at all times and interpret the relationship between trade-offs and opportunity costs.
21. Explain why scarcity requires individuals, governments, and societies to make choices.
22. Analyze how scarcity creates the need for economic policy and allocation.
Monetary and Fiscal Policy
1. Differentiate between monetary and fiscal policies and identify when it may be appropriate to use a given policy.
2. Identify the organization and functions of the Federal Reserve System and their influences on the economy.
3. Explain how federal budgetary policy and the Federal Reserve System’s monetary policies influence overall levels of employment, interest rates, production, and prices.
4. Explain how the Federal Reserve System uses its control over the reserve ratio, open market operations, and the discount rate to control the money supply and the implementation of tight and easy money policy.
5. Determine how inflation, unemployment, and gross domestic product statistics are used in policy decisions.
6. Describe how fiscal, monetary, and regulatory policies affect overall levels of employment, output, and consumption.
Productivity
1. Define factors of production (e.g., labor, capital, entrepreneurship, and natural resources).
2. Explain the principle of diminishing returns and how it relates to productivity and consumption.
3. Describe how investments in human and physical capital, including new technology, affect standard of living, quality of life, and increase productivity.
4. Describe the impact of worker productivity (output per worker) on business, the worker, and the consumer.
5. Explain how wages are affected by the market value and productivity of the individual working.
6. Define specialization and identify how specialization may affect the economy.
7. Give examples to explain how businesses and industry depend upon workers with specialized skills to make production more efficient.
8. Discuss the effects of government expenditures, regulations, and tax policies on productivity.
9. Analyze the impact of political actions, natural phenomena (e.g., wars, legislation, and natural disaster), and the investments in research and development on producers and production decisions.
10. . Analyze and discuss economic indicators that reflect productivity.
Macroeconomics
1. Differentiate between microeconomists’ and macroeconomists’ approach to the economy and their solutions to economic problems.
2. Analyze factors that are studied in determining the economic health of our economy.
3. Discuss how changes in disposable income affect the economy.
4. Explain the effects of leading economic indicators on a personal financial plan.
5. Identify and analyze leading economic indicators and the methods of using the indicators to validate opinions about the state of the economy in the near future.
6. Illustrate and measure the impact of inflation and recession.
7. Evaluate the impact of employment/unemployment on production, consumption, and exchange.
8. Define gross domestic product (GDP) and interpret fluctuations in the GDP.
9. Discuss major factors that affect the level of a country’s gross domestic product (GDP) (e.g., quantity and quality of natural resources, quantity and quality of human capital, and quantity and quality of capital stock).
10. Locate the per capita GDP of various nations to compare the levels of economic well-being.
11. Differentiate between GNP, NDP, NI, PI, and DI.
12. Explain how the Consumer Price Index measures the rate of inflation and interpret its relationship to purchasing power.
13. nterpret economic data depicted through illustrations (e.g. tables, curves, graphs, ratios, percentages, indexes, and values).
14. Construct tables and graphs depicting economic information (e.g., financial statements, pie charts, line graphs, and bar graphs).
Market Structures
1. Differentiate the factors of competition in a free enterprise system and describe how those factors affect the everyday function of a business.
2. Analyze the role that supply and demand, competition, prices, incentives, and profits play in determining what is produced and distributed in a competitive market system.
3. Explain how changes in the level of competition in different markets affect individuals and the economy.
4. Explain how competition among sellers of a good or service generally results in lower prices for buyers and lower profits for sellers.
5. Describe how competition among buyers of a good or service generally results in higher prices for buyers and higher profits for sellers.
6. Discuss the major barriers to new firms entering a market and how the barriers affect the level of competition in an industry.
7. Explain how competition is maintained in the U.S. economy and how the level of competition varies in differing market structures (e.g., monopoly, oligopoly, monopolistic, and perfect competition).
8. Compare and contrast the different types of market structure.
9. Describe the characteristics of monopolistic and oligopolistic competition and identify examples in the current market.
10. Determine the role of government in preventing private monopolies and regulating public monopolies.
Investments and Interest Rates
1. Describe and explain the role of money, banking, and savings in everyday life.
2. Interpret stock market purpose and function and analyze stock market performance.
3. Explain how interest rates are determined by market forces that influence the amount of borrowing and saving done by investors, consumers, and government officials.
4. Describe how interest rates balance savings and borrowing and affect consumer purchasing power.
5. Identify the risk/return trade-offs for saving and investing.
6. Evaluate the impact of employment/unemployment on investment and savings.
7. Describe how saving and investing influence economic growth (capital formation).
8. Explain the role of credit in a market economy.
9. Compare the advantages and disadvantages of using various forms of credit and the determinants of credit history.
Government Role
1. Analyze the changing relationships among business, labor, and government and how each has affected production, distribution, and consumption.
2. Distinguish between private goods and services (family car or a local restaurant) and public goods and services (interstate highway systems or U.S. Postal Service), and explain how and why public goods and services are provided.
3. Explain how government’s redistribution of income through taxation, spending, and assistance/entitlement programs affects the well-being of people and businesses in an economy.
4. Identify the types of taxes levied by differing levels of government (e.g., income tax, sales tax, and property tax).
5. Analyze the relationship between the federal deficit and the national debt and how they are affected by the sources of national income and international trade.
6. Identify the impact of the political structure on economic systems.
7. Explain how laws and government policies (e.g., property rights, contract enforcement, and standard weights/measurements) establish rules that help a market economy function effectively
8. Explain how government intervention with market prices can cause shortages or surpluses of a good or service (e.g., minimum wage policies, rent freezes, and farm subsidies).
9. Identify and evaluate how stabilizers (e.g., unemployment compensation, welfare benefits, Social Security, subsidies, and tax rates) affect economies in transition
Types of Businesses/Economic Institutions
1. Compare and contrast different types of business ownership (e.g., corporation, partnership, and sole proprietorship).
2. Define the role of profit-making and not-for-profit companies in the U.S. economy
3. Describe different kinds of economic institutions in the U.S. economy (e.g., households, businesses, financial institutions, government agencies, labor unions, and nonprofit organizations).
4. Explain the role of banks in facilitating the exchange of financial resources (e.g., loans, creating money, checking accounts, and Federal Reserve System).
5. Explain how and why people who start new businesses take risks to provide goods and services, considering profits as an incentive.
6. Explain the concept of organized labor and business.
Business Cycles/Circular Flow
1. Define circular flow, interdependence, product market, and factors of production market.
2. Describe the role of businesses and individuals in the circular flow.
3. Explain how change in one component of the circular flow of economic activity affects other components.
4. Describe the role of government in the circular flow (e.g. taxation, services, and national debt).
5. Define business cycle, prosperity, recession, depression, and recovery.
6. Compare and contrast the different stages of the business cycle (e.g. recover, expansion, trough, and peak).
Supply & Demand
1. Explain the law of supply, the law of demand, and equilibrium price.
2. Demonstrate an understanding of the supply and demand curves that show increases and decreases in quantity supplied and quantity demanded.
3. Appraise the effects of technological changes, changes in consumer preferences, price inputs, environment, and legislation on supply and demand and price of goods/services.
4. Describe the concept of elasticity and inelasticity and analyze elasticity as it applies to supply and demand and consumer decisions.
5. Explain how efficient production and allocation of goods and services in a market economy are based on pricing information
6. Describe how relative prices affect the buying and selling decisions of consumers and producers and illustrate how a change in price affects quantity demanded or quantity supplied.
7. Describe how price ceilings and floors cause shortages or surpluses.
International Trade/Global Economics
1. Analyze the impact of world trade and relate it to the U.S. free enterprise system.
2. Explain the basic characteristics of international trade, including absolute and comparative advantage, barriers to trade, exchange rates, and balance of trade.
3. Analyze why trade barriers and why exchange rates affect the flow of goods and services among nations.
4. Explain how currency exchange rates affect international trade.
5. Discuss the advantages and disadvantages and distributive effects of trade restrictions (e.g., tariffs, quotas, and embargoes).
6. Analyze the impact of international issues and concerns on personal, national, and international economics.
7. Explain how specialization promotes international trade and how international trade increases total world output and interdependence among nations

Alignment

NBEA Standards
  • Economics & Personal Finance
  • Entrepreneurship
  • International Business
  • Management
Career Clusters
  • Business Management & Administration
  • Finance
  • Marketing, Sales, & Service

Eligibility

States may submit up to 4 entries.
Competitors must be registered for NLC and pay registration fee.
Competitors must pay dues by 11:59 p.m. Eastern on March 1.

Timeline

Test: 1 hour