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Virtual Economics

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Unit 3: Lesson 16 - Making Choices About Saving and Investing
Capstone: Exemplary Lessons for High School Economics - Teacher's Guide
This lesson introduces the distinction between savings and the investment. It demonstrates how the price of money --the interest rate--is critical to making the right savings and investment choices. It explains when, under various conditions, it is or is not in people's best interest to save.
Grade(s): 9-12
Concepts: Choice, Inflation, Interest, Investment, Loanable funds market, Purchasing power, Real interest, Savings

Lesson 8: Central Banking With or Without Central Planning
Focus: Economic Systems
Students participate in an auction to see how large increases in the money supply can cause inflation. Then they examine data on the relationship between inflation and growth rates in the money supply in different countries. That leads to a discussion of central banks and monetary policy. Finally, students plot a scatter diagram to investigate the relationship between the political independence...
Grade(s): 9-12
Concepts: Inflation, Monetary Policy, Central Bank

Lesson 11 - Money and Inflation
Economics in Action: 14 Greatest Hits for Teaching High School Economics
Students observe a simple demonstration to determine the functions that money performs. They next participate in two rounds of an auction illustrating how increases in the money supply lead to inflation. They view an active demonstration of the equation MV = PQ to understand the relationship among the variables and the intent of monetary policy. This lesson may be used as either an introduction to...
Grade(s): 9-12
Concepts: Federal Reserve System, Functions of money, Inflation, Monetary policy, Money, MV = PQ

Lesson 14: Borrowing decisions and expected returns
Master Curriculum Guide: Economics and Entrepreneurship
Entrepreneurs must possess or have access to funds to start their businesses. They may use their own funds; get others to give them funds for a share of the business and claims on future profits (equity financing); or they may borrow money from others (debt financing) with the contractual obligation to pay back the amount of money borrowed plus additional dollars called interest payments.
Grade(s): 9-12
Concepts: Interest, Interest Rates, Investment, Expected Returns,

Lesson 6 - What Is a Bond?
Learning, Earning and Investing: High School
In this lesson the students learn what bonds are and how bonds work. They learn the basic terminology related to bonds and participate in a simulation activity aimed at showing that bonds are certificates of indebtedness, similar to an IOU note. Finally, the students explore credit ratings and calculate average coupon rates for various bond ratings in order to determine the relationship between ra...
Grade(s): 6-8, 9-12
Concepts: Bond, Bond rating, Coupon, Coupon bond, Coupon rate, Default, Face value, Maturity date, Par value, Risk, Zero-coupon bond

Lesson 12 - Building Wealth over the Long Term
Learning, Earning and Investing: High School
The students are introduced to the case of Charlayne, a woman who becomes, accidentally, a millionaire. Charlayne's success, the students learn, was unexpected, but not a miracle. It can be explained by three widely understood rules for building wealth over the long term: saving early, buying and holding, and diversifying. The lesson uses Charlayne's decisions to illustrate each of these rules. It...
Grade(s): 6-8, 9-12
Concepts: Compound interest, Diversification, Forms of saving and investing, Reward, Risk

Lesson 10: Why Are Some Nations Wealthy?
Focus: Economic Systems
Students work in pairs to examine data from several nations regarding size, natural resources, and population. Using these data they make predictions about which nations are likely to be below, at, or above the world average of per capita Gross Domsetic Product (GDP). GDP is the basic economic measure of national income, so per capita GDP is a key measure of a nation's per person income. Studen...
Grade(s): 9-12
Concepts: Economic Growth, Productivity, Property Rights, Saving and Investment, Physical Capital and Human Capital, Natural Resources, Trade

Lesson 33: Changing Economic Conditions Affect Entrepreneurs
Entrepreneurship in the U.S. Economy: Teacher Resource Manual
In this lesson, students will define inflation, recession, and business cycle; identify leading economic indicators; state implication of changes in certain leading economic indicators for hypothetical entrepreneurial enterprises; analyze effects of unemployment and inflation on entrepreneurs; analyze effects of recession and expansion on different sectors of the economy; predict effects of govern...
Grade(s): 9-12
Concepts: Unemployment, Recession, Inflation, Depression, Expansion, Business Cycle, Leading economic indicators

Unit 6: Lesson 38 - Aggregate Demand and Aggregate Supply
Capstone: Exemplary Lessons for High School Economics - Teacher's Guide
Students build their understanding of aggregate demand and aggregate supply. They use their new skills to analyze the effects of events and government monetary and fiscal policies on inflation, unemployment, and economic growth. In the first two Activities, students identify different components of AD and AS and the factors that shift AD and AS. In the last two Activities, students use AD and A...
Grade(s): 9-12
Concepts: Aggregate demand and shifting, Aggregate supply and shifting, Fiscal policy, Macroeconomic equilibrium, Monetary policy, Price level, Real gross domestic product

Unit 3: Lesson 7 - Who Should Control the Money Supply - the U.S. Congress or the Federal Reserve?
Civics and Government: Focus on Economics
Students learn that the basic U.S. money supply consists of currency in circulation and checking account balances in banks. They learn that the money supply increases when banks make loans, and that by controlling bank lending activity, the Federal Reserve System (an independent regulatory agency established by Congress in 1913) attempts to control the supply of money in the economy. The student...
Grade(s): 9-12
Concepts: Money supply, Monetary policy, Unemployment, Inflation,

Lesson 10: Macroeconomic Stabilization Policies and Institutions
Focus: Institutions and Markets
This lesson begins by reviewing the discovery and adoption of Keynesian fiscal policies in the United States and other nations following World War II. Students then participate in several exercises to ascertain their understanding of appropriate demand-side tools of fiscal policy, which is conducted by national legislative and executive branches of government, and tools of monetary policy, which ...
Grade(s): 9-12
Concepts: Unemployment, Inflation, Fiscal policy, Automatic stabilizers, Monetary policy, Central banks, Discount rate, Reserve requirement, Open market operations,

Lesson 4: Klips And Kupons
Economies in Transition: Command to Market
The students participate in the Klips and Kupons simulation. During the simulation, they discover how a change in the money supply can cause changes in the price level. They formalize this discovery by relating the equation of exchange to their simulation results. Some of the consequences of inflation and hyperinflation are examined.
Grade(s): 9-12
Concepts: Inflation, Hyperinflation, Equation of Exchange, Nominal Gross Domestic Product, Real Gross Domestic Product

Unit 3: Lesson 8 - To What Extent Do Economic Conditions Determine the Outcome of Presidential Elections?
Civics and Government: Focus on Economics
Students consider how economic performance is evaluated and are introduced to four major indicators of macroeconomic performance: growth rate of real income, unemployment rate, inflation rate, misery index. They complete a worksheet comparing changes in these indicators with the outcomes of U.S. presidential elections from 1960 to 1992 and examine the influence of economic conditions of the likel...
Grade(s): 9-12
Concepts: Real disposable personal income, Unemployment, Inflation, Misery index,

Lesson 6 - Financial Planning: Budgeting Your Financial Resources
Personal Decision Making: Focus on Economics
Students participate in a motivational activity in which they evaluate the costs and benefits of impulse buying and its effect on living on a limited income. After they analyze a sample budget, students develop their own budget that might be appropriate upon leaving school.
Grade(s): 9-12
Concepts: Scarcity, Opportunity cost, Income, Purchasing power, Fixed expenses, Variable expenses, Impulse buying,

Unit 3: Lesson 6 - How Can Changes in the Federal Government's Budget Stabilize the Economy?
Civics and Government: Focus on Economics
The teacher discusses with the class how a market economy like that of the United States goes through the Business Cycle of unstable swings in economic activity. The students then write and perform a three-act skit which illustrates how the level of income and spending in an economy can fall, and how intentional fiscal policy changes in the spending and taxing levels of government result in a mul...
Grade(s): 9-12
Concepts: Income-spending chain, Multiplier effects, Business cycle, Unemployment, Inflation, Fiscal policy,

Lesson 6- The Decline of Spain
World History: Focus on Economics
Students work in small groups to study the Spanish economy in the 16th century and draw conclusions for developing nations today.
Grade(s): 9-12
Concepts: Economic Growth, Government Spending, Taxation, Monopoly, Human Resources, Inflation, Price Controls

Lesson 18: Economic Ups and Downs
Focus: High School Economics
News reports about the economy often refer to data concerning economic growth, recessions, inflation, and unemployment. Students (and adults) should understand these data and how they both reflect and affect peoples' and companies' decisions to buy, save, invest, and produce. These data or measures of national economic performance have also become major topics in national elections and political...
Grade(s): 9-12
Concepts: Business cycles, Gross domestic product, Unemployment, Consumer price index, Recession, Inflation, Economic growth, Fiscal policy,

Lesson 8: Resisting the Siren Song of Inflation
From Plan to Market: Teaching Ideas for Social Studies, Economics, and Business Classes
Students participate in a simulation, use a demonstration to illustrate the causes of inflation, and apply their new knowledge about the transition economies by answering questions related to two readings.
Grade(s): 9-12
Concepts: Prices, Inflation, Money Supply, Monetary Equation of Exchange, Redistributional Effects of Inflation

Unit 6: Lesson 32 - The Effects of Inflation
Capstone: Exemplary Lessons for High School Economics - Teacher's Guide
Students examine recent inflation rates in the United States and discuss the interpretation of inflation rates. They read about the inflation-related experiences of teachers in the former Soviet Union and Eastern Europe and use these experiences as a basis for identifying the effects of high rates of inflation.
Grade(s): 9-12
Concepts: Effects of inflation, Hyperinflation, Inflation

Macroeconomics Unit 2: Lesson 3 - Price Indexes and Inflation
Advanced Placement Economics: Teacher Resource Manual
At various points in the economic history of the United States, inflation has been a major economic problem. The high inflation rates of the late 1960s and 1970s led to the severe recession of the early 1980s. This experience has had a major impact on our economic policy today. Monetary policy under Alan Greenspan's chairmanship of the Federal Reserve System has revolved around controlling inflati...
Grade(s): 9-12
Concepts: Anticipated inflation, Unanticipated inflation, Price index,

ONLINE LESSONS:

online The Early 1980s: A Tough Time For Home Builders and Mortgage Bankers
Have you ever thought of how much it might cost you to finance the purchase of a home? The home's purchase price is likely to be many times the yearly income of the typical household. If families waited until they had accumulated enough savings to use cash to pay for a home, they would be denied the benefits of homeownership for many years. Instead, most families go to a mortgage banker o...
Grade(s): 9-12
Concepts: Banking,Credit,Federal Reserve Structure,Housing,Inflation,Interest Rate,Mortgage,Deflation,Federal Reserve

online Stock Market Price History
Each of us seek to make wise investment decisions that will make our money grow. Unfortunately, we cannot predict the future, but the past can give us a window to understanding the risks and rewards of investing in the stock market. This lesson will track the history of a Dow Jones 30 stock and enable to student to calculate the return on his investment.
Grade(s): 9-12
Concepts: Inflation,Investing,Deflation

online Multipliers and the Mystery of the Magic Money
Students learn about the purpose of the reserve requirement, how money is "created" in the economy through fractional reserves, and how the Federal Reserve uses the reserve requirement and loans to correct economic instability.
Grade(s): 9-12
Concepts: Banking,Central Banking System,Inflation,Supply,Tools of the Federal Reserve,Deflation

online It's a Not So Wonderful Life
In this lesson students learn about banks and banking. The study the fractional reserve system, and the role the Fed plays in the money creation process.
Grade(s): 9-12
Concepts: Banking,Central Banking System,Money Supply,Supply,Money,Savers

online Avatar, King of the Box Office?
On January 26, 2010, the film Avatar officially topped Titanic as the top-grossing film of all-time at the box office. However, the following day, Forbes.com published an article entitled Is Avatar Really King of the Box Office? The article explains how using calculations such as the Consumer Price Index (CPI), one can show how the film Gone With the Wind has grossed more when the value of the box...
Grade(s): 9-12
Concepts: Gross Domestic Product (GDP),Inflation,Consumer Price Index (CPI),Deflation,Real vs. Nominal,Causes of Inflation

online What causes inflation?
This lesson explores different types of inflation and terms associated with this economic concept. You may have heard relatives talk about the good old days when a dollar would buy something. What happened to that dollar? Why won’t it buy as much as it did last month or last year? What happened is inflation. In this lesson you will examine the various causes and theories of inflation as...
Grade(s): 9-12
Concepts: Demand,Incentive,Inflation,Markets,Price,Supply

online One is Silver and the Other's Gold
Students learn about the money supply and that it can affect the value of money. Students investigate this in the 1896 presidential election (Bryan vs. McKinley, Free Silver vs. Gold Standard) and examine a political cartoon that depicts how some people felt about this issue. Students answer questions about what they would do with more money and what might happen if the money supply increa...
Grade(s): 6-8, 9-12
Concepts: Functions of Money,Inflation,Money Supply,Price,Role of Government,Deflation

online The Wizard of Oz Visits Japan
Deflationary conditions in the United States have not returned since the Great Depression. Instead, U.S. policymakers have frequently found it necessary to battle inflation over the past sixty years. While not a problem in America, concerns have been recently voiced about the economic effects of deflation in Japan. This EconomicsMinute examines (approximately one century after the public...
Grade(s): 9-12
Concepts: Inflation,Deflation

online Calculating Simple Interest
How do banks calculate the amount of interest paid on a loan? In this lesson, students will view a Livescribe Pencast to learn how to find the dollar amount in interest that is due at maturity. This lesson uses different time periods such as days, months, and years in the calculation as well as varying interest rates.
Grade(s): 6-8, 9-12
Concepts: Interest Rate,Interest,Principal,Simple Interest

online President Jackson and the Veto of the Second National Bank
ESSENTIAL DILEMMA Could the conflict over the Second National Bank have been resolved in a way that supported the values advocated by both President Jackson and Congress?
Grade(s): 9-12
Concepts: Money Supply,Definition of Money,Monetary Policy,Money,Risk,Government Failure,Market Failures,Bank,Fraud Risk,Paper Money,Characteristics of Money

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