A question about the comparative advantage theory of economist David Riccardo was considered so easy that it drew a laugh. The identity of the Ford Motor Co.'s stock sticker symbol was another slam dunk.
Such was the nature of the competition at the second annual Economics Challenge national championship held this month at New York City's High School of Economics and Finance (HSEF). The contest is jointly sponsored by the Goldman Sachs Foundation and the National Council on Economic Education, a New York-based group dedicated to promoting economic literacy among American students and teachers.
But if the adults present at the high school competition rejoiced to see a handful of teens from across the US conversant with basic economics, many of them found little to cheer about when viewing the nation as a whole.
According to a recent test given by the National Center on Education and the Economy (NCEE), adults answered correctly only 57 percent of the time, while high school students knew only 48 percent of the answers to questions about basic and applied economics. Such results cause business leaders to worry about the economic savvy of their future employees and customers, says Robert Duvall, president and CEO of NCEE.
To counter the trend, the Economics Challenge this year engaged 2,000 students in 26 states. At four regional competitions and the finals, teams answer basic economic questions drafted by a university professor.
This year eight teams competed in the finals. The Minnesota team won the contest open to all students, while an Iowa team took first place in the competition open only to advanced placement or International Baccalaureate students.
Not all the competitors plan to continue studying economics. Several say they will use their college years to pursue such fields as fine arts, engineering, chemistry, and physics.
But the NCEE's hope is that whatever walk of life they enter, they will carry with them a basic grasp of the principles of business.
The HSEF, host school for the event, did not send a winning team to the competition. But the school itself received kudos and verbal honors simply for having its doors open.
Before Sept. 11, it was literally in the shadow of the World Trade Center, a block away. The building was used by New York University's graduate business school until the high school opened in 1993 and stands at the heart of New York's financial district. After a few months of doubling up with a school in a different part of the city, students are now back in their regular classrooms, just yards away from tourists lining up to see ground zero.
The high school was established not only to promote economic literacy among teens, but also to capitalize on the learning potential in the Wall Street environment. Its 750 students follow a core college-prep curriculum, in addition to focusing on business and economics.
They take classes with such titles as "Welcome to Wall Street" and "Banking and Credit," and in their junior year they are offered six- to eight-week paid internships at major Wall Street firms. Throughout their time at the HSEF they are also able to take off-site courses at institutions like the Federal Reserve Bank and the New York Stock Exchange.
Any New York City student can apply to the school. Normally, about 3,000 eighth-graders vie for 150 seats in the freshmen class. This year, after the destruction of the World Trade Center, only 1,000 students applied, but a school official says interest remains strong and the numbers should rise again next year.
1. What cycle has a peak, recession, trough, recovery?
2. What do the letters PPI stand for?
3. Economics is not fundamentally about money but about how to deal with what?
4. Agricultural price supports are an example of the government setting a price ______?
5. What type of goods are imported by a closed economy?
6. In 1973 President Gerald Ford presented an economic policy represented by buttons bearing the letters WIN. What did this stand for?
Answers: (1) The business cycle. (2) Producer Price Index. (3) The allocation of scarce resources. (4) Price floor. (5) None. (6) Whip Inflation Now.