Are you looking for an engaging and dynamic lesson that hits multiple intelligences and gives your students an opportunity to evaluate the propensities of consumers to consume and to save? Do you need an in-depth activity that provides an opportunity for your students to put principles into practice by calculating the spending and tax multipliers and the change in real GDP output that can be generated by fiscal policy and the multiplier effect? This is the activity you've been looking for!
This activity includes:
1) This "Propensities and Multipliers" Activity includes 4 parts. It begins with an exercise that provides marginal propensities and income data for two countries and asks students to calculate the marginal propensities to consume and save in each nation. Next, students will have a chance to put principles into practice by working backwards to solve for changes in income, consumption, and savings, as well as the MPC and MPS for three separate nations. Next, students will have an opportunity to prove their comprehension by calculating the change in consumer spending and the total change in real GDP output produced by changes in government spending using the spending multiplier. Finally, students will use their knowledge to calculate the change in consumer spending and the total change in real GDP output produced by changes in tax policy using the tax multiplier.
This activity can be used in many different ways in the classroom. Students can work independently, in pairs or this activity can be used as a jigsaw in order to facilitate a class wide discussion about the topics discussed in the activity.
2) A detailed answer key to the lesson activity to save you time and help guide student comprehension.
This activity can also be found in a bundle paired with a PowerPoint, Keynote and PDF version of a fully customizable lecture found here:
If you like this activity, check out our Unit Activity Bundle that includes activities for all of the objectives in this unit.
Fiscal Policy Unit Activity Bundle
Best of all, this activity aligns to our "Unit 3.3 - Propensities and Multipliers" video lecture, which can be found here:
Unit 3.3 - Propensities and Multipliers
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