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Lesson 20: Aggregate Supply and Demand: The Sum of Their Parts, and More
Focus: High School Economics
Over the last two decades, the most dramatic pedagogical innovation in teaching introductory economics has been the use of aggregate supply and demand curves to illustrate key macroeconomic concepts and policy issues. There is still some debate about this development among university economists, but because these curves look and operate so much like the standard supply and demand curves featured ...
Grade(s): 9-12
Concepts: Aggregate demand, Aggregate supply, Gross domestic product, Fiscal policy, Monetary policy,

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,

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 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,

Unit 6: Lesson 37 - Can Government Manage the National Economy?
Capstone: Exemplary Lessons for High School Economics - Teacher's Guide
Although economists agree much more often than they disagree, the opinions of prominent economists on economic policy often conflict. This lesson seeks to clarify why economists disagree. Understanding the reasons for disagreement among experts may help students to make their own judgments about economic policies. The lesson concludes by having students compare and contrast the major macroecono...
Grade(s): 9-12
Concepts: Aggregate demand, Aggregate supply, Assumptions, Fiscal policy, Keynesian theory, Monetarist theory, Monetary policy, New Classical theory, Rational Expectations theory

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 21 - Lessons from History: Stock Market Crashes
Learning, Earning and Investing: High School
The students analyze information about the stock market crash of 1929 and the stock market crash of 1987. They use the information to make posters about the crashes, highlighting what happened during and after the crashes, causes of the crashes and the role of the Federal Reserve in each crash. After presenting their posters to the class, the students discuss similarities and differences between t...
Grade(s): 6-8, 9-12
Concepts: Causes and effects of the stock market crash of 1929, Causes and effects of the stock market crash of 1987, Federal Reserve, Monetary policy, Supply and demand

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,

Unit 9: Lesson 2 - Why Does the Federal Government Overspend its Budget?
United States History: Eyes on the Economy - Through the 20th Century
The teacher will present a definition of "federal budget deficits" and provide a historical overview of deficits since 1960. Students will use the HDG principles to predict levels of support for different proposals to reduce the deficit.
Grade(s): 9-12
Concepts: National debt, Deficit, Incentives,

Unit 6: Lesson 35 - Fiscal Policy: A Two-Act Play
Capstone: Exemplary Lessons for High School Economics - Teacher's Guide
Groups of students are given outlines for one of two acts in a play describing either expansionary or contractionary fiscal policy. After choosing parts and preparing lines for their roles, two groups are chosen to perform the play. Events in the play are discussed by reference to concepts of fiscal policy. More advanced classes may then discuss current debates about the effectiveness of fiscal...
Grade(s): 9-12
Concepts: Contractionary fiscal policy, Crowding out (optional), Expansionary fiscal policy, Fiscal policy, Multiplier effects, Supply-side fiscal policy

Lesson 12 - Fiscal Policy: A Two-Act Play
Economics in Action: 14 Greatest Hits for Teaching High School Economics
Groups of students are given outlines for one of two acts in a play describing either expansionary or contractionary fiscal policy. After the students choose parts and prepare lines for their roles, two groups are chosen to perform the play. Students then discuss the events in the play using a Visual that defines concepts related to fiscal policy. More advanced classes may then discuss current deb...
Grade(s): 9-12
Concepts: Contractionary fiscal policy, Expansionary fiscal policy, Fiscal policy, Multiplier effects, Supply-side fiscal policy, (Optional) Crowding out

Macroeconomics Unit 3: Lesson 5 - Short-Run Equilibrium
Advanced Placement Economics: Teacher Resource Manual
In this lesson, the focus is on the short-run equilibrium between aggregate supply and demand, on the changes in output and price level if aggregate supply or aggregate demand changes, and on the students' ability to explain correctly why the curve shifted in a specific direction. The relationship between the simple Keynesian model and the aggregate supply-aggregate demand model is explored. Activ...
Grade(s): 9-12
Concepts: Macroeconomic equilibrium, Equilibrium price level, Aggregate demand, Aggregate supply, Keynesian model, Full employment,

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

Macroeconomics Unit 5: Lesson 1 - Policy Lags and Crowding-Out Effect
Advanced Placement Economics: Teacher Resource Manual
This lesson discusses the lags associated with monetary and fiscal policy making and analyzes the direct and indirect effects of government budget deficits. The direct effect of these deficits is an increase in interest rates. When the government borrows money to finance its deficit, this results in an increase in the demand for money, or, alternatively, the demand for loanable funds. This in turn...
Grade(s): 9-12
Concepts: Monetary policy, Fiscal policy, Barro-ricardo effect,

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 19: Money, Interest, and Monetary Policy
Focus: High School Economics
Growth of the money supply is related to inflation. This lesson examines how money supply growth rates can lead to inflation when they outpace the growth in output. To maintain price stability and steady rates of economic growth, the Federal Reserve System (the Fed) tries to control the supply of money. Changes in the money supply lead to changes in interest rates, which, in turn, affect the av...
Grade(s): 9-12
Concepts: Money supply, Inflation, Open market operations, Reserve requirements, Discount rate, Interest rate,

Macroeconomics Unit 6: Lesson 4 - Monetary and Fiscal Policy in a Global Economy
Advanced Placement Economics: Teacher Resource Manual
This lesson combines the knowledge of monetary and fiscal policy and the economy developed in Units 3 through 5 with the knowledge of international finance. It explains and analyzes the impact of domestic policy on the foreign exchange rate. It is essential that the students understand the interaction between the domestic economy and the international economy to understand the current policy discu...
Grade(s): 9-12
Concepts: Monetary policy, Fiscal policy, Domestic aggregate demand,

Unit 7: Lesson 1 - Whatdunit? The Great Depression Mystery
United States History: Eyes on the Economy - Through the 20th Century
Students read a brief passage posing the basic question about the Great Depression: How did it happen? A brief simulation activity shows how unemployment in one part of the economy can lead to unemployment in other parts of the economy. With the aid of two visuals, the teacher discusses the reduction in the stock of money caused by bank failures from 1930 to 1933.
Grade(s): 9-12
Concepts: Recession, Depression, Demand, Income, Multiplier, Money, Fractional reserve banking, Federal reserve system,

Unit 7: Lesson 2 - Where Did All the Income Go?
United States History: Eyes on the Economy - Through the 20th Century
Students discuss an economic mystery and study the definition of money. Class discussion follows a role play activity, and students identify the consequences of additional saving on income when no other changes take place in the economy.
Grade(s): 9-12
Concepts: Income, Saving, Interdependence, Aggregate demand, Aggregate supply,

Unit 7: Lesson 3 - Boom and Bust in the 1830s
United States History: Eyes on the Economy - Through the Civil War
Students read Activity 1 and use the Tables in Activity 1 to answer questions. Following the discovery that the increase in the money supply, 1834-1837, was caused primarily by increases in specie, students read Activity 2, which describes the causes of that specie increase and the causes of the Panic of 1837.
Grade(s): 9-12
Concepts: Money supply, Specie, Reserves, Inflation, Depression,

ONLINE LESSONS:

online The Economics of the New Deal
The stock-market crash of 1929 is generally seen as the start of The Great Depression, the worst economic downturn in the history of the United States. The Depression had devastating effects on the country. But it also served as a wake-up call for economic reform. Until the Great Depression, the U.S. government had made very few modifications to the nation's economic policies. It left the dealings...
Grade(s): 9-12
Concepts: Role of Government,Fiscal Policy,Monetary Policy

online Phillips Curve
This lesson explores the relationship of unemployment to inflation in the 1960s and after. Students will discover the short-run trade-off between inflation and unemployment when unemployment is less than its natural rate. Students will learn how wage setters formed adaptive expectations about future inflation and included these in their wage demands. At the conclusion of this lesson, students wil...
Grade(s): 9-12
Concepts: Aggregate Demand (AD),Aggregate Supply (AS),Inflation,Price,Unemployment,Unemployment Rate,Wage

online FRED and the Federal Budget Interactive Lesson
Students will use a Federal Reserve Economic Data (FRED) data dashboard to calculate budget deficits, surpluses, how much federal budgets in certain budget years added to the total public debt, and gross federal debt as percent of GDP. Using the information they have collected, students will answer questions requiring analysis and inference.
Grade(s): 9-12
Concepts: Budget,Budget Deficit,Gross Domestic Product (GDP),Trade-off,Investment,Productivity,Budget Surplus,Consumption,Debt,Recession,Total Cost (TC),Total Revenue (TR),Revenue

online AP Macroeconomics - The Deficit and the Debt
This lesson supports the Inflation, Unemployment, and Stabilization Policies section of the Advanced Placement Macroeconomics course. It introduces government budget deficits and the national debt and analyzes the long-run effects of budget deficits on the economy. This lesson appears as Lesson 3, Unit 5: Inflation, Unemployment, and Stabilization Policies in CEE's [EEL-link id='5227' title='Adva...
Grade(s): 9-12
Concepts: Budget Deficit,National Debt,Fiscal Policy,Budget Surplus

online Fiscal and Monetary Policy Process and Interactive Quiz
Students follow each step of fiscal and monetary policy processes, to see the logic of how these tools are used to correct economic instability.
Grade(s): 9-12
Concepts: Aggregate Demand (AD),Demand,Government Expenditures,Government Revenues,Tools of the Federal Reserve

online AP Macroeconomics - The Business Cycle: Introduction to Macroeconomic Indicators
Bell Ringer: Ask students how they think the economy is doing right now -- is it "up" or "down"? You can get an idea of where the economy is (i.e., the phase of the business cycle) at http://www.nber.org/cycles.html, the website of the the organization that dates U.S. business cycles. This lesson from [EEL-link id='5227' title='Advanced Placement Macroeconomics (4th Edition)' ...
Grade(s): 9-12
Concepts: Inflation,Unemployment,Macroeconomics,Recession,Depression,Business cycle

online Jokes, Quotations, and Cartoons in Economics
Students will apply their knowledge of economics to the analysis and interpretation of jokes, quotations, and cartoons in economics. Students will watch a Paul Solman video of an interview of Yoram Bauman, the Stand up Economist. Students will use Daryl Cagel's cartoon website, Jokes on the Web, and news media to find economics humor and interpret.
Grade(s): 9-12
Concepts: Budget Deficit,Business,Central Banking System,Credit,Gross Domestic Product (GDP),Incentive,Role of Government,Stock Market,Labor,Unemployment,Recession,Spend

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 Party Platforms and Economic Issues
According to Gallup, Americans have considered the state of the economy "among the most important U.S. problems" since 2008. The issues frequently debated leading up to any presidential campaign include many economic issues such as improving the economy, how to reduce unemployment, the federal deficit, and taxes. Similar topics have highlighted many of the debates leading up to the 2016 election. ...
Grade(s): 9-12
Concepts: National Debt,Taxes,Trade,Employment

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

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