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Posted: 07/09/2008
Fed resource: Money, Banking and Monetary Policy
Short description: Historical Prices
   
Lesson time: 60 minutes
Materials: Copy of Money: Money, Banking & Monetary Policy, and student access to an online inflation calculator
Audience: High School
Grades: 9, 10, 11
Subjects: Money and Banking
Concepts: Money and Banking - Banks, Barter, Inflation, Money
Documents: Historical Prices and Economic Vocabulary.doc  |  Historical Prices--Answer Key.doc
Tip/Tool:
1. Distribute copies of the publication to each student. Divide the class into 4 groups. Assign each group one the following sections to read: Group 1: What Is Money?; Group 2: The Fed's Role; Group 3: How Banks Create Money; and Group 4: Monetary Policy and the Economy and The Fight Against Inflation.


2. Explain that each member of each group must be prepared to share the information in the reading with others in the class. Tell each member of each group to record economic vocabulary words from each section. (money, barter, medium of exchange, purchasing power, relatively scarce, inflation, Federal Reserve, banks, and monetary policy, money supply)
3. When the students have finished reading, create five or six new small groups that include at least 1 student from eeach of the original four groups. Instruct students to share the inforamtion from their reading with the members of the new group.

4. After students have shared information in groups, have students share words from their economic vocabulary list one word at a timewith the entire class. When students share a word, write the word on the board, then efine and explain the terms (see attachment).

5. Remind the students that inflation is a sustained rise in the average price level. Point out that over time, prices and wages rise.

6. Open a web browser to: http://minneapolisfed.org/research/data/us/calc/

7. Distribute a copy of the Historical Prices list to each student. Tell students that the inflation calculator allows them to see the price of something from the past in today's dollars. Note that the inflation calculator is based on the Consumer Price Index (CPI) which is revised periodically for many years. Therefore, answers may vary slightly over time due to CPI revisions. Also note that inflation for the current year is estimated since annual CPE data are not available until the end of the year, and that data are only available for 1913 to the current year. Enter prices one at a time. Allow students to record the price in today's dollars. A
8. Allow students to suggest prices for items today in order to determine what todays prices would be in another year.

Submitted by: Barbara Easley
Hazelwood School District