Presentation on theme: "INFLATION MADE EASY POWERPOINT PRESENTATION. Inflation: A Lesson Plan By Paul C. Lohr ED 639 Dr. Helms October 23, 2002."— Presentation transcript:
INFLATION MADE EASY POWERPOINT PRESENTATION
Inflation: A Lesson Plan By Paul C. Lohr ED 639 Dr. Helms October 23, 2002
Rationale Social Studies topic of Economics. Lesson plan adheres to Ohio Content Standards 2002 draft requirements for 11 th grade students. In depth study and working knowledge of U.S. Government and Economy.
Objective The students will understand the role of money as a medium of exchange. The students will understand how the quantity of money in circulation impacts the general price level.
Assessment Students will demonstrate understanding of the concept with: In class discussion. In class essay worksheet. Essay homework assignment. Small group economic model story problems. 90% of students correct (goal @ 100%).
Class Exercises 1. Money, Gold & Barter Demo 2. Elephant & $1.00 Demo 3. Elephant & $2.00 Demo 4. 1 st CD Shopping Exercise 5. 2 nd CD Shopping Exercise
ECONOMICS TODAY Inflation and You! The Role of Money
Rising Prices = Inflation
Why Use Money? Barter ….…(Trade Things) Precious Metals ….…(Gold) Fiat Money…….(Currency)
Barter, Gold, Money Need 3 Volunteers #1 come on up & get this cash #2 come on up & get this bag of gold #3 come on up & bring your chair
Money How does it work? Do others accept cash all the time? For everything? How do you know value or price of a product?
Gold (Precious Metals) Does everyone accept it all the time? For Everything? Is it easy to carry around with you?
Barter Trading stuff for other stuff… That chair you have! Will everyone accept it for other stuff? How easy is it to carry around? What is the value?
Science Experiment Lab Experiment Mix two ingredients in a test tube: Money Product Cook up some inflation
Spending Habits Law of gravity Predictable Absolute “Law” of consumption MPC Marginal Propensity to Consume People spend 97% of money available
Economic Stew Recipe: Add $1 to test tube Add 1 elephant to test tube Stir and heat This is a mini-economy mixture Pour into pie plate Sample to taste
Our Entire Economy Produces one elephant Has one dollar in circulation What is the price of the elephant? Hint: All the money always gets spent… Nothing to buy except the one elephant..
Price of the Elephant is……
Now We Create Inflation Take test tube Add one elephant Add $2 Stir & heat Pour into pie plate Sample to taste
Price of the Elephant is….
More Dollars Chasing Fewer Goods = Monetary Inflation
Let’s Go Shopping…. Let’s see how this works in real life. Shopping for your favorite music CD And see inflation happen…right before your eyes!
1 st Shopping Exercise $1000 distributed among students 20 Music CDs to buy Average CD price = $ 50
2 nd Shopping Exercise $2000 distributed among students 20 Music CDs to buy Average CD price = $100
Class Discussion Results of shopping? What happened to CD prices? Why? If only $500 used for 2 nd shopping… What would average CD price be? Why?