Inflation: Taking Prices Higher

Students will explore the meaning of inflation and its impact through history. This lesson concentrates heavily on the following subject matter:

• Language arts: reading comprehension
• Mathematics: percentages, decimals, etc.

Procedure

Part I: Journal entry
What can you buy for a dollar these days? What’s the best “bang for your buck” or the best thing a dollar will buy you, today?

Part II: Class discussion
Visit Inflation Summit and read content aloud. Discuss inflation and examples of inflation from your own past – or from students’ parents’ past. Some prices to consider:

• Movie tickets
• Bus fares
• Lollies
• Postage stamps
  

Also discuss:

• Inflation can be more impressive over longer periods of time.
• What's the price of a dozen eggs today?
  

Discuss:

• Do prices always rise over time?
• Can you predict how prices will rise?
• The current rate of inflation (approximately 3%)
  

Demonstrate how to calculate what the price of eggs would have been in 2001, 2002, 2003, according to an inflation rate of 3%. What other factors can influence the price of eggs?

Part III: Individual work (or homework)
Hand out the worksheet and read the instructions aloud. Give students time to complete the handout, answering questions, if necessary.

Part IV: Regroup
Discuss worksheets as a class. Talk about other factors that may affect these items’ prices, such as:

• Popularity (demand) and availability (supply)
  
• Brand versus generic products

Also explain deflation as opposed to inflation and why they occur.

Assessment
Worksheet
Class participation

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