Why Should stable prices be a macroeconomic goal? I mean, why do we even care about inflation?
Are you beating inflation, or is inflation beating?
There are three possible responses to this question.
Give students time to give different opinions on what they may think the responses are.
1. The rate of Inflation is growing faster then
your rate of income:
2. Your rate of income is growing faster then
the rate of inflation.
3. Your rate of income and the rate of inflation is the same.
When your nominal income- the actual current dollar amount - is adjusted to any price change that have occurred, you get your real income.
CPI= Cost Price Index
the wrench in this picture repersents the pressure
put upon our income by outside forces such as inflation.
Remember the CPI reflects what's happened to overall consumer prices), x100.
This PPT is mainly pictures and words. I put a script in the memo so teachers will be able to simply teach this basic economic principle.
While all my economic PPTs on the surface seem very simple.. however, This PPT and all PPTs are not to be the center stage in the lesson.. It is used to promote learning at what ever level your students are.
If you have any problems or suggestions for new economic topics please contact me and I will fix the problem or design a new PPT per request.