SOCIAL STUDIES LESSON PLAN RESOURCES
SOCIAL STUDIES CLASS
Economics
TOPIC
Macroeconomics
LESSON 6
GDP, Price Fluctuations, and The Unemployment Rate
Measure The Economic Health Of The Country
OBJECTIVES
By the end of this lesson, the student will be able to:
 Define Gross Domestic Product (GDP).
 Describe the impact of GDP on the economy.
 Contrast inflation and deflation and describe the impact of both indicators on the economy.
 Explain the importance of the unemployment rate as an indicator of economic health.
CLASSROOM SUPPLIES NEEDED
Depending on what content and which activities are provided, some to all of the items below will be needed.
 Whiteboard and dry erase markers or flipchart paper and markers
LESSON RESOURCES
Depending on what content and which activities are provided, some to all of the items below will be needed.
Pre-Work for Students to Read Before Class
 Handout 1 – How Does GDP Affect A Country’s Economy?
 Handout 2 - The Effects of High Inflation
 Handout 3 – Effects of the Unemployment Rate
Pre-Work for Students to View Before Class
n/a
Handouts to Provide Students In Class
 Handout 4 - Calculate the Consumer Price Index
 Handout 5 – The Unemployment Rate
Online Videos Students Will Watch In Class
n/a
KEY VOCABULARY AND IMPORTANT CONCEPTS
 Gross Domestic
Product
 Deflation
 Unemployment Rate
 Cyclical
Unemployment
Economics > Macroeconomics > GDP, Price Fluctuations, and The Unemployment Rate Measure The Economic Health Of
The Country
Page 1
SOCIAL STUDIES LESSON PLAN RESOURCES
SOCIAL STUDIES CLASS
Economics
TOPIC
Macroeconomics
 Intermediate Goods
 Full Employment
 Underground
 Structural
Economy
Unemployment
LESSON 6
GDP, Price Fluctuations, and The Unemployment Rate
Measure The Economic Health Of The Country
 Frictional
Unemployment
 Seasonal
Unemployment
 Inflation
STUDENT PRE-WORK FOR THIS LESSON
Directions
1. Students are to read the handouts.
2. Students are to prepare for a class discussion of the handout provided.
Resources To Provide Students
 Handout 1 – How Does GDP Affect A Country’s Economy?
 Handout 2 – The Effects of High Inflation
 Handout 3 – Effects of the Unemployment Rate
Class Preparation
During class discussion, students will be asked to share information covered in the three handouts.
ANTICIPATORY SET FOR THE LESSON (2 MINUTES)
Mode
Student Response
Topic
Explain the meaning of the phrase “too many dollars chasing too few goods”
http://economics.about.com/od/helpforeconomicsstudents/f/inflation.htm
This phrase is used to refer to rising inflation in the economy. Inflation, which is
a rise in the price of goods and services, occurs when the demand for goods
and services exceeds the supply of goods and services.
LESSON CONTENT AND ACTIVITIES: ECONOMIC HEALTH IS MEASURED BY GDP (20 MINUTES)
Mode
Teacher Lecture
Class Discussion
Topic
GDP as an Indicator of Economic Health
Teacher and students will define Gross Domestic Product (GDP).
Teacher and students will describe the function of GDP.
Economics > Macroeconomics > GDP, Price Fluctuations, and The Unemployment Rate Measure The Economic Health Of
The Country
Page 2
SOCIAL STUDIES LESSON PLAN RESOURCES
SOCIAL STUDIES CLASS
Economics
TOPIC
Macroeconomics
LESSON 6
GDP, Price Fluctuations, and The Unemployment Rate
Measure The Economic Health Of The Country
Teacher and students will explain how GDP is calculated, and will identify the
economic activity that determines GDP.
Teacher Provides
Instructions
How Does GDP Affect A Country’s Economy?
Teacher instructs students to answer questions from Handout 1How Does GDP Affect A Country’s Economy?
Questions are listed on the Power-Point Slide.
Students’ answers should include the following information:
Why are GDP figures important to businesses?
Student Activity
Businesses use GDP figures to decide whether they will expand or contract. If
GDP has grown, then businesses may increase capital resources, and hire
more workers. They may just try to survive if the economy has not grown.
How does GDP impact currency value?
If GDP has increased, then it will take more foreign currency to buy fewer U.S.
dollars. If GDP has decreased since the last year, then it takes fewer British
pounds to buy more U.S. dollars
Why do governments pay attention to GDP figures?
GDP figures impact Fiscal Policy. If GDP figures are low, then the government
may increase simulative measures. If GDP figures are good, then the
government will try to maintain economic growth, and control inflation.
How does the Federal Reserve react to GDP figures?
If the GDP figures increase then, it is an indication that people are spending
money. The Federal Reserve may raise interest rates by raising discount rates
charged to banks, to control for inflation. This tool decreases the amount of
money in circulation. When GDP numbers decline, the Federal Reserve lowers
the interest rate, by lowering the discount rate charged to banks. Banks can
lower their interest rates, which makes it easier for their customers to borrow
money.
LESSON CONTENT AND ACTIVITIES: ECONOMIC HEALTH IS MEASURED BY INFLATION (15 MINUTES)
Mode
Topic
Economics > Macroeconomics > GDP, Price Fluctuations, and The Unemployment Rate Measure The Economic Health Of
The Country
Page 3
SOCIAL STUDIES LESSON PLAN RESOURCES
SOCIAL STUDIES CLASS
Economics
TOPIC
Macroeconomics
Teacher Lecture
Class Discussion
Inflation/Deflation
Teacher Lecture
Class Discussion
Causes of Inflation
Teacher Lecture
Class Discussion
Impact of Inflation
LESSON 6
GDP, Price Fluctuations, and The Unemployment Rate
Measure The Economic Health Of The Country
Teacher and students define and discuss the impact of inflation on economic
growth. The teacher explains how inflation is calculated.
Teacher and students describe the causes of inflation, which include demand
pull inflation and cost push.
Teacher and students discuss the impact of inflation on consumer spending,
and GDP.
Teacher gives students copies of Handout 4-Calculate The Consumer Price
Index.
Teacher provides the formula for calculating the Consumer Price Index is,
CPI = Current cost of market basket
X 100
Base year cost of market basket
Teacher Provides
Instructions
Student Activity
Teacher instructs students to calculate the Consumer Price Index for the
market basket of goods in 2014. The base year is 2013.
Item
2013
2014
Ladies Tunic
$35.00
$40.00
Drive 8GB
$14.00
$14.99
Protein Shake
$18.00
$18.88
Pineapple Chunks
$ 3.40
$ 3.49
Total Cost of Market
Basket
$70.40
$77.36
CPI= $77.36 X 100 = 1.098 x 100= 109.8
$70.40
Teacher Lecture
Class Discussion
Causes of Deflation
Teacher and student define deflation and discuss the causes of deflation.
Economics > Macroeconomics > GDP, Price Fluctuations, and The Unemployment Rate Measure The Economic Health Of
The Country
Page 4
SOCIAL STUDIES LESSON PLAN RESOURCES
SOCIAL STUDIES CLASS
Economics
Teacher Lecture
Class Discussion
TOPIC
Macroeconomics
LESSON 6
GDP, Price Fluctuations, and The Unemployment Rate
Measure The Economic Health Of The Country
Teacher explains why economists do not consider deflation a good economic
indicator.
Impact of Deflation
Teacher and students discuss the impact of deflation on GDP, employment
and investments.
LESSON CONTENT AND ACTIVITIES: THE UNEMPLOYMENT RATE: A MEASURE OF ECONOMIC HEALTH
(10 MINUTES)
Mode
Teacher Lecture
Class Discussion
Topic
The Unemployment Rate
Teacher and students define the unemployment rate.
Teacher and students discuss what the unemployment rate numbers reveal
about economic growth.
Teacher Lecture
Class Discussion
Types of Unemployment.
Teacher describes the conditions such as technological changes and economic
changes that lead to different types of unemployment.
Teacher Provides
Instructions
Student Activity
Teacher gives students copies of Handout 5 -The Unemployment Rate, and
instructs them to answer the questions on the handout.
1.
Which group has the highest unemployment rate?
Persons who have less than a high school diploma.
The unemployment rate was 9.0 or higher.
2.
Which of the types of unemployment could explain the reason for
the
high unemployment rate for the group in question 1?
Structural- the skills of the workers do not match the skills needed for the
job.
Economics > Macroeconomics > GDP, Price Fluctuations, and The Unemployment Rate Measure The Economic Health Of
The Country
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SOCIAL STUDIES LESSON PLAN RESOURCES
SOCIAL STUDIES CLASS
Economics
TOPIC
Macroeconomics
3.
LESSON 6
GDP, Price Fluctuations, and The Unemployment Rate
Measure The Economic Health Of The Country
Compare the unemployment rate of persons with Some College/
Associates, to persons with High School/No College.
High school /No college- 6.0 or greater, Some College/ Associates -5. 0 or
greater.
Teacher Lecture
Class Discussion
The Impact of Unemployment
Teacher and students identify the ways the unemployment rate impacts the
economy. Students may share information from Handout 3- Effects of the
Unemployment Rate.
LESSON ASSESSMENT AND STUDENT LEARNING EVALUATION (15 MINUTES)
Mode
Extended Response
Activity
Topic
Write a short answer response which describes the impact of GDP, Price
Fluctuations, and Unemployment on the Economy.
The Gross Domestic Product (GDP) figures are very important to the
government, to business owners, and to the consumers.
Governments use GDP figures to decide whether to stimulate a sluggish
economy, or maintain current growth levels, and control inflation in an
economy that is growing.
Business owners use GDP figures to decide whether they should increase
production, decrease production, or maintain current production levels.
During periods of high inflation, governments may increase taxes, and
decrease spending on programs in the economy. Tax increases lower the
amount of money that consumers have available to spend in the economy.
The Federal Reserve may decide to raise interest rates, by raising the discount
rates charged to banks. Banks pass that increase to their customers, by
raising the interest rates. When interest rates increase, the amount of people
who can borrow money to spend in the economy decreases.
Consumers feel the impact of high inflation when they purchase goods and
services. During periods of high inflation, consumers pay more for the goods
and services that they purchase. This increase in prices, causes a decrease in
the amount of money available for saving and investing.
Economics > Macroeconomics > GDP, Price Fluctuations, and The Unemployment Rate Measure The Economic Health Of
The Country
Page 6
SOCIAL STUDIES LESSON PLAN RESOURCES
SOCIAL STUDIES CLASS
Economics
TOPIC
Macroeconomics
LESSON 6
GDP, Price Fluctuations, and The Unemployment Rate
Measure The Economic Health Of The Country
Businesses are impacted because the demand for goods and services
declines. Productivity decreases, and businesses may lay off workers.
The unemployment rate also impacts government policies. When the
unemployment rate is high, the government may set aside money for a work
program, and or, cut taxes to encourage individuals to spend more money in
the economy.
If high unemployment numbers continue for a long period of time, then the
demand for goods and services declines, and businesses may be forced to
close.
Individuals looking for jobs during periods of high unemployment, face heavy
competition for all available jobs. Workers who have jobs are reluctant to
quit or retire. Job seekers may be forced to take part-time work, and or jobs
for which they are over qualified.
Economics > Macroeconomics > GDP, Price Fluctuations, and The Unemployment Rate Measure The Economic Health Of
The Country
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