How does inflation affect the economy, and how can effective monetary policy by the Federal Reserve help control inflation? With the Fisher equation and analysis of annual CPI rates during the 1970s and early 1980s, your class members will approach these questions and examine the effect that high inflation can have on individuals and businesses.

Concepts

inflation, monetary policy, the consumer price index

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Additional Tags

cpi, monetary policy, inflation, social studies

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Pros

• Handout details definition, causes, and harmful effects of rapid inflation
• Worksheet included explaining the Fisher equation

Cons

• The resource is heavily based on reading, and the instructor may wish to supplement with more interactive and engaging activities

Common Core

RH.11-12.2 RH.11-12.3