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INFLATION INTRODUCTION:
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Read the Story from Time Magazine about Jani the Giraffe (you can skim read the second half). Think about the following questions:
1. What was the previous price of the toy giraffe, what is the new price? 2. Identify 5 causes of inflation from the article? 3. Identify 5 consequences to society of inflation? |
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HAND OUT REQUIRED FOR INFLATION TOPICS
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| inflation chp. |
Fig 1: Fred CPI data 12 month rolling:
| inflation_updated.docx |
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activity TWO: mEASURING INFLATION |
- Distinguish between inflation, disinflation and deflation.
- Explain how inflation and deflation are typically measured by calculating a consumer price index (CPI).
- Explain how different income earners may experience a different rate of inflation when their pattern of consumption is not accurately reflected by the CPI.
- Explain how inflation figures may not accurately reflect changes in consumption patterns and the quality of the products purchased.
- Explain how economists measure a core/underlying rate of inflation.
- Explain how a producer price index measuring changes in the prices of factors of production may be useful in predicting future inflation.
- HL Only Construct a weighted price index, using a set of data.
- HL Only Calculate the inflation rate from a set of data.
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ACTIVITY 1: Constructing your own consumer prices index (CPI). Using the handout below construct your own CPI.
How accurate is it to the year on year CPI data? What issues in your methodology would you need to ensure an accurate figure? |
| construct_your_own_consumer_prices_indices.docx |
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ACTIVITY THREE: consequences of inflATION |
- Discuss the possible consequences of a high inflation rate.
- Discuss the possible consequences of deflation.
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ACTIVITY : Causes of inflation |
- Explain demand-pull inflation.
- Explain cost-push inflation.
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GOVERNMENT POLICIES TO DEAL WITH INFLATION
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- Evaluate government policies to deal with the different types of inflation.
| the_inflation_game_-_roles.pptx |