Barry Bosworth and Michael Horrigan discuss how the federal government measures inflation.
Use the following lesson idea to introduce your students to the difference between Inflation and the Consumer Price Index. Upon completion, students will be able to define inflation, the inflation rate, the Consumer Price Index, and how the Consumer Price Index (CPI) is used to calculate the nation's inflation rate.
Opening class discussion:
a. Ask students how much the price for a bag of chips was when they were in elementary school.
b. Then, ask the students how much the price of the same bag of chips is today.
c. Do the same price comparison for various goods or services, such as postage stamps, gasoline, movie tickets, manicures, etc., and keep track of the prices on the board.
d. Ask the students to consider what it means when the prices for goods and services increases.
e. Conduct a class discussion on who is most and least hurt/affected by rising prices.
Have students watch the following C-SPAN video clip and answer the questions below:
VIDEO CLIP: CPI and Calculating Inflation (1:40)
a. What is the Consumer Price Index (CPI)?
b. Identify at least 5 different ways that the CPI is used for.
c. When did the government begin measuring the CPI?
d. Is the CPI an accurate measure of calculating our nation’s inflation?
e. Does the CPI measure individual prices or average prices?
Use the Bureau of Labor Statistics website to complete the assignment listed below in Step 4.
Have students create a one-pager for everything they learned about the CPI and inflation:
a. A one-pager is a way to make sense of what was just learned by connecting students’ ideas to the material by being creative and without merely summarizing the information.
b. The one-pager should include information, pictures, quotes, and original thought so that the audience will understand what the student has learned.
c. Students should not be restricted to lined paper in order to harness imagination and creativity about the topic.