Updated: May 3, 2013 12:14PM
A group of Chicago high school students is proving they know more about economics than their peers in Illinois -- and a lot of ordinary citizens!
Students at Northside College Prep beat 50 Illinois teams to win the Economics Challenge competition, sponsored by the Federal Reserve Bank and the Goldman Sachs Foundation. The Federal Reserve Bank is also sponsoring Money Smart Week, which includes dozens of opportunities for Chicagoans to broaden their financial knowledge this week.
Never before has a Chicago public school won the Illinois championship. Demonstrating a breadth of knowledge, the senior class team captured first place in the microeconomics competition, while the junior team won first in the macroeconomics competition.
Could you answer these questions?
What's the most efficient way to solve the problem of pollution?
Correct answer: Tradeable pollution permits. (Among the wrong choices: environmental standards or outright bans.)
When did the current economic recession begin?
Answer: December 2007.
According to mainstream economists, what is the principal cause of the United States' macroeconomic instability?
Answer: Swings in investment spending and adverse supply shocks. (Clearly, the Fed didn't want to blame its own monetary policy!)
Members of the winning senior class team are Jennifer Freidman, Aral Johnson, Gigi Lee, and Spencer Rosenfeld. All are planning to attend colleges ranging from Harvard to the University of Chicago and the University of Illinois this fall.
Members of the junior class team are Kalila Holt, Minda Rebholz, Tyler Throop and Peter Wilk. They will be applying for college later this year.
Credit goes to their adviser, John Belcaster, who turned to teaching high school economics four years ago, after a career as a civil rights attorney in private practice. He created the Northside Prep economics course which now attracts 143 students -- five sections -- the most popular course in the school. He also coaches the economics club teams after school. Two years ago Belcaster received the prestigious Golden Apple "teacher of distinction" award.
The Challenge consisted of a test with 45 written questions, ranging from micro to macro to international economics. That was followed by a game show format, in which each team had to agree on an answer and hit the buzzer first -- and answer correctly -- to score.
Teams from eight Illinois finalist schools (whittled down from the original 50 schools) sat in an exam room at the Federal Reserve Bank of Chicago to take the three-part exam, which had a tight deadline.
After completing the written exams, the top two scoring teams advanced to the "Quiz Bowl" round. The finalists were from Northside College Prep and the Adlai Stevenson School in Lincolnshire.
The first team to correctly answer 13 questions (out of a possible 25) won the championship. Stevenson got off to a commanding lead of 9-2, but Northside Prep managed to come back from the deficit to eke out a one-point win.
Says Belcaster: "We were the first high school in America to adopt Paul Krugman's college economics textbook when it was published three years ago. This textbook has an incredible ability to immerse students in both the theory of economics and its application to what's going on in the world. It's quite relevant to current events."
It turns out that textbook decision had quite an impact in creating the final correct answer that won the title.
The final question: What famous economist won the Nobel Prize in 2008?
The students jumped to hit the buzzer, shouting the name of their economics hero, the author of their textbook, and the correct answer to the question: Paul Krugman.
Next stop: The team goes on to Houston to compete in the regional competition, and hopefully on to New York for the finals on May 16. Chicago wishes them well.
Each student on the team received $100. And if they win the national competition, they'll each get a $3,000 savings bond. Clearly, they have learned another great lesson in economics. It pays to win!
And that's The Savage Truth.
Terry Savage is a registered investment adviser. Distributed by Creators Syndicate.