TheImpactofInflation-RutgersNJAES.pdfVIP

The Impact of Inflation LESSON DESCRIPTION (Background for the Instructor) In this lesson, students will learn what inflation is and how it impacts financial decisions (e.g., the selection of investments) and lifestyles (e.g., a person’s standard of living today and in the future). Students will learn how to calculate past and future costs of goods and services, how inflation impacts different groups of people (e.g., savers and retirees), and how U.S. inflation rates have changed during the past 100 years. The lesson includes five activities that instructors can select from. In these activities, students will: ? View and debrief two YouTube videos about inflation: Explaining Inflation (which describes the impact of inflation on prices) and What is Inflation? (which explains how inflation impacts investing) ? Conduct a Web Quest to learn about historical inflation rates in the United States ? Complete past and future price inflation math problems using an online calculator ? Prepare a story or skit with a character of someone as a $100 bill describing their past and future value ? Complete a Winners and Losers activity to analyze who benefits from and is hurt by inflation and why The lesson also contains 10 assessment questions (5 multiple choice and 5 True-False), learning extensions (i.e., suggested learning activities beyond the scope of the lesson plan), and references and resources. INTRODUCTION (Background for the Instructor) Inflation is an increase in the price of goods and services. Over time, inflation reduces the purchasing power of a dollar, thereby lowering its value. Inflation causes losses for both consumers and the overall economy. For example, if the price of gasoline rises, drivers must pay more to fill their tanks and they have less money available for