Inflation and CPI Substitute Lesson Plan

Use this 50 minutes substitute plan to teach inflation and cpi through one concrete decision. Students calculate inflation and explain how unexpected inflation redistributes purchasing power. The directions are written so a substitute who has never taught economics can run the period. Students work from the page, show their reasoning, and leave one product that is quick to check.

The classroom prompt

Calculate the basket costs and CPI. Then analyze a worker whose nominal wage rises 6 percent and a one-year lender charging 4 percent when actual inflation is 7 percent.

Put the question where every student can see it and do not supply vocabulary before students commit to an answer. Their first explanation becomes the evidence you use during the debrief.

Materials and setup

Provide calculators and this basket: 3 meals and 2 bus rides. Base prices are $8 and $2; current prices are $9 and $2.50.

Open the inflation module if you want students to test the same idea on an interactive model after the paper task. A projected version is enough; students do not need accounts for this lesson.

Run the lesson

Answer key and teacher moves

• Base basket cost is 3($8) + 2($2) = $28; current cost is 3($9) + 2($2.50) = $32.
• CPI is $32/$28 × 100 = 114.29, so inflation is 14.29 percent from the base.
• A 6 percent nominal wage increase is a real wage decrease of roughly 8.29 percent using the approximation.
• Unexpected 7 percent inflation benefits the fixed-rate borrower and harms the lender; the approximate real rate is -3 percent.

Do not give credit for the correct direction alone. Ask students to name the changed determinant, identify the curve or quantity that changes, and connect the change to the final outcome. A complete explanation contains a cause, a model move, and a result.

What to collect

Collect all calculations and a four-sentence explanation of redistribution.

Most likely misconception: Students say everyone loses equally from inflation or confuse a slower inflation rate with falling prices.

Support and extension: Provide formulas at each section. Extend by computing the exact real interest rate as 1.04/1.07 - 1.

A clean closing question

End with: What changed, what stayed fixed, and what evidence proves your conclusion? That sentence works as the final written check because it forces students to separate a cause from the movement it produces. Collect it, scan for the misconception above, and use the first three minutes of the next class to repair the pattern if needed.

This resource is ready to copy into a slide, handout, or LMS assignment. If you assign it for points, publish the success criteria before students begin: correct model, correct direction, and an explanation that links the two.