This lesson introduces students to three basic economic indicators: real GDP, the inflation rate, and the unemployment rate. The students work in small groups to develop an economic forecast, using the three basic economic indicators. They participate in a simulation activity involving a fictional economic forecasting firm. The firm has taken on a client who wishes to start a new business and wants to know whether this is a good idea, given the current economic climate. To advise the client, the students produce a report based on research they conduct about the state of the economy, according to the three economic indicators.
How does a market economy determine prices? Students graph supply and demand curves for pizza in the fictional town of Pizzaville using two data sets and learn that consumers are willing to buy more pizzas at lower prices while sellers are willing to produce more pizzas at higher prices. The intersection of the supply and demand curves is the market price.
To explore the concept that people invest in themselves through education, the students work in two groups and participate in a mathematics game. Both groups are assigned mathematics problems to solve. One group is told about a special technique for solving the problems. The other group is not. The game helps the students recognize that improved human capital allows people to produce more in a given amount of time—in this example, more correct answers in the time provided, or in less time. Next, the students identify the human capital required for a variety of jobs. Finally, they learn about the connections among investment in human capital, careers, and earning potential.
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This publication contains complete instructions for teaching the lessons in Capstone. When combined with a textbook, Capstone provides activities for a complete high school economics course. 45 exemplary lessons help students learn to apply economic reasoning to a wide range of real-world subjects.
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