Transcript Beginning Activity

Beginning Activities
• Title today’s lesson: Inflation
• Video Activity: Dr. Evil
• Mission Statement: To prepare you for a life of responsible
citizenship
• Daily Expectations:
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Use bathroom before class
Come in quietly and get to work immediately
Pay attention and be respectful
No phones
No food or drinks other than water
Do your work
Give AP quality effort
• 5 bonus points for supplies
Extra Credit
• 5 points each 6 weeks for bringing supplies:
– Paper clips
– Pens
– Paper
– Staples
– Tape
Inflation
Chapter 14
Economic Instability
Degrees of Inflation
• Creeping inflation – 1 to 3% per year
• Galloping inflation – 100 to 300% per year
• Hyperinflation – 500% and up
– Ex. Hungary’s currency inflation went up to 828
octillion to 1 because it printed money to pay its
bills.
– What currency rule does that violate?
Causes of Inflation
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Prices are pulled up by excessive demand.
Federal government deficit spending pulls up demand.
Rising input costs, specifically labor, increases prices.
Unexpected increase in nonlabor inputs can increase
prices.
• Self-perpetuating spiral of wages and prices keeps
going up and can’t be stopped.
• When the monetary supply grows faster than the real
GDP.
Consequences of Inflation
• Money has less value.
• Change in spending habits, which disrupts the
economy
• Risky investments to take advantage of higher
prices
• Alters distribution of income because loans
are paid back with inflated dollars.
Ending Activity
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Measuring Inflation
Finish any other work
Make sure the floor is clean
Connect to our objectives: How does this
prepare you for life and the future?