This document provides a guide for the development of the 2006 National Assessment of Educational Progress (NAEP) Economics Assessment. The framework is designed to assess the outcomes of student education in and understanding of economics in grade 12 as part of NAEP. Economic literacy is defined as the ability to identify, analyze, and evaluate the consequences of individual decisions and public policy and includes an understanding of: (1) Fundamental constraints imposed by limited resources, the resulting choices people have to make, and the trade-offs they face; (2) How economies and markets work and how people function within them; and (3) Benefits and costs of economic interaction and interdependence among people and nations. The content of the framework is grouped into three areas: Market Economy (relevance of limited resources; how individuals and institutions make and evaluate decisions; role of incentives; how buyers and sellers interact to create markets; how markets allocate resource; economic role of government in a market economy); National Economy (concepts, terminology, and data used to identify and describe inflation, unemployment, output, and growth; factors that cause changes in those conditions; role of money and interest rates in an economy; mechanics and the appropriate uses of Federal Reserve monetary policies and federal government fiscal policies); and International Economy (reasons for individuals and businesses to specialize and trade; rationale for specialization and trade across international borders; comparison of the benefits and costs of that specialization and resulting trade for consumers, producers, and governments). Within each content area, questions are designed to assess economics in three cognitive categories: (1)Knowing; (2) Applying; and (3) Reasoning. The following are appended: (1) References; (2) NAEP Economics Framework Project; (3) Steering Committee Charge to the Planning Committee; (4) Sample items (Market Economy; National Economy; International Economy); (5) Framework Development Process; and (6) Acknowledgments. (Contains 2 tables.) [Assessment and Item Specifications: NAEP 2006 Economics is a companion document to this framework.]