As inflation raises the overall price level in an economy, the purchasing power of the dollar decreases and both borrowing and lending costs increase. The January 2023 issue of Page One Economics® discusses how price indexes can be used to transform nominal wages and interest rates into real, or inflation-adjusted, values.

Inflation numbers are important economic indicators. But thinking beyond the numbers reveals a deeper reality. For example, how do businesses respond to inflation? Some resort to shrinkflation and skimpflation. Learn about these practices and their effects on consumers in the December 2022 issue of Page One Economics®: Focus on Finance.

Understanding the reality of inflation can help consumers make decisions in personal finance. Learn more about inflation, how it’s measured, and how the inflation rate is calculated in the December 2021 issue of Page One Economics: Focus on Finance.

Poster showing a mule "Industry" upsetting a cart as it is bothered by flies "Unjust taxation," "Agitation," Waste," "Strife," and "Unfair laws." Title continues: As a consumer has it ever occurred to you there is a close relationship between your pocketbook (household expenses) and industrial conditions? You complain of high prices but have you ever done anything to discourage such price-boosting factors as burdensome laws which impose unnecessary taxes on legitimate American industry and constant waste promoted by destructive agitators? Help to keep prices down by chasing the flies away from industry. Issued by the National Industrial Conservation Movement, 30 Church Street, New York City. Copies supplied on request. No. E-10.

Poster showing scales, with "Cost of Production" outweighing "Price to Consumer." Title continues: Do you know that the price of many articles you buy is materially increased by laws which add to production costs, imposing unnecessary or excessive taxation and fomenting discord instead of promoting good will between wage-earners and wage-payers? You complain of high prices, but have you ever done anything to discourage these price-boosting factors? Don't kick at the price kick at the reasons! Issued by the National Industrial Conservation Movement, 30 Church Street, New York City. Copies supplied on request. No. E-2.

Two things we'd all like to see less of: climate change, and mass shootings. The direct way to address these would be to make fossil fuels more expensive, and restrict access to guns. But politically, neither of those policies will happen anytime soon. Fortunately, economists have another approach: change the prices of *related* goods. See how lowering the price of solar panels can change the use of coal, and how raising the price of bullets can reduce shootings.

Many people think that immigrants take jobs from Americans. But is that true? Turns out there isn't a fixed number of jobs to be fought over by Americans and immigrants. Immigrants actually end up creating more jobs for Americans - find out how.

Many people think that using laws to reduce prices will make things easier to buy. Economists know that the opposite will happen: putting price controls on a good makes it harder to obtain. This video looks at examples, from Venezuela to apartments in the U.S.

When sellers raise prices in response to crises, mere mortals call it "price gouging". Economists call it "arbitrage". Buying low and selling high explains how goods move around in the economy. And preventing prices and arbitrage from working is what caused gasoline shortages after hurricane Sandy.

Looking for engaging content for your economics courses? The Institute for Humane Studies has curated this collection of educational resources to help economics professors enrich their curriculum. Find videos, interactive games, reading lists, and more on everything from opportunity costs to trade policy. This collection is updated frequently with new content, so watch this space!

Drivers may wonder whether the most recent spike in gasoline prices is temporary or will be longer lasting. Will prices eventually decline—maybe even to below $3 per gallon? Or is it time for drivers to alter their driving habits, maybe by buying a hybrid car? Be sure to read the September 2012 issue for a discussion of factors that might influence that decision.

In this lesson, students act as buyers with a fixed amount to spend on beverages. They identify a favorite beverage from a list of beverages offered for the same price. They then react to changes in the price of that favorite beverage. Students use the data collected from this activity to describe the relationship between price and quantity demanded. They analyze other examples and learn that the relationship between price and quantity demanded holds for most goods, and that this relationship is called the law of demand.

Proficiency LevelNovice LowNCSSFL-ACTFL Can-Do Statements:I can ask and answer questions about what something is.I can ask and answer questions about the price of one object among a group of items.I can describe the location of an object to help someone understand the item I’m talking about.

In this video, Professor Art Carden of Samford University simplifies the laws of supply and demand into short haikus.

This online activity shows how to use FRED, the Federal Reserve's free economic data website, to measure changes in the cost of living in your lifetime. Each month, the Bureau of Labor Statistics (BLS) collects data on prices consumers pay for tens of thousands of goods and services, everything from software to car insurance. Using rigorous statistical methods, the BLS transforms this mountain of price data into the consumer price index (CPI). The CPI is a numerical index that measures inflation by tracking monthly changes in prices urban dwellers pay for a diverse market basket of thousands of goods and services. Following simple instructions, you will locate the overall level of U.S. consumer prices as it existed on your birth date. You will then compare that level with the level today to see how prices have inflated during your lifetime. FRED's ability to create a graph with a custom index scale will allow you to visualize the rise in prices over your lifetime.

Have you ever heard someone say "Back in my day, a gallon of gas cost a quarter!" Comparing today's prices with prices "back in the day" can be misleading. Both inflation and deflation between then and now have to be taken into account. Read the August 2013 issue to learn more about the effects of inflation on prices.

Students will compare the price of goods from one time period to another and through discussion and role play interpret the effects of inflation on consumers. They will categorize goods and services according to the eight major groups of the consumer price index and be able to determine the difference between the Consumer Price Index (CPI) and the core CPI.

The eighth episode of our podcast series answers a crucial economic question: Where do prices come from? Listeners discover that supply and demand work together like the two blades of a scissors to determine the market equilibrium – and the prices of the things you buy.

Rate

Type of Unit: Concept

Prior Knowledge

Students should be able to:

Solve problems involving all four operations with rational numbers.
Understand quantity as a number used with a unit of measurement.
Solve problems involving quantities such as distances, intervals of time, liquid volumes, masses of objects, and money, and with the units of measurement for these quantities.
Understand that a ratio is a comparison of two quantities.
Write ratios for problem situations.
Make and interpret tables, graphs, and diagrams.
Write and solve equations to represent problem situations.

Lesson Flow

In this unit, students will explore the concept of rate in a variety of contexts: beats per minute, unit prices, fuel efficiency of a car, population density, speed, and conversion factors. Students will write and refine their own definition for rate and then use it to recognize rates in different situations. Students will learn that every rate is paired with an inverse rate that is a measure of the same relationship. Students will figure out the logic of how units are used with rates. Then students will represent quantitative relationships involving rates, using tables, graphs, double number lines, and formulas, and they will see how to create one such representation when given another.