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Topic: Inflation/deflation 

Economics

 Standard 7.  Understands savings, investment, and interest rates
  Level IV (Grade 9-12)
   Benchmark 7.Understands that expectations of increased inflation may lead to higher interest rates
    Knowledge/skill statements
     1.Knows that expectations concerning inflation can affect interest rates
 Standard 9.  Understands how Gross Domestic Product and inflation and deflation provide indications of the state of the economy
  Level III (Grade 6-8)
   Benchmark 1.Knows that inflation refers to a sustained increase in the average price level of the entire economy
    Knowledge/skill statements
     1.Knows the meaning of inflation
     2.Knows how to measure inflation
   Benchmark 2.Knows that deflation refers to a sustained decrease in the average price level of the entire economy
    Knowledge/skill statements
     1.Knows the meaning of deflation
     2.Knows how to measure deflation
   Benchmark 3.Understands that inflation reduces the value of money and that people’s purchasing power declines if their incomes increase more slowly than the inflation rate
    Knowledge/skill statements
     1.Understands that inflation reduces the value of money
     2.Understands how purchasing power is affected by the rate of inflation
     3.Understands the value of money
  Level IV (Grade 9-12)
   Benchmark 1.Knows that inflation is usually measured by the Consumer Price Index (CPI) which shows the increases or decreases in price level from one year to another
    Knowledge/skill statements
     1.Knows that the Consumer Price Index is normally used to measure inflation
     2.Knows that CPI stands for Consumer Price Index
     3.Knows that the Consumer Price Index measures the change in price level year to year
   Benchmark 6.Understands that inflation creates uncertainty because it affects different groups differently (e.g., inflation hurts people on fixed incomes, but helps people who have borrowed money at a fixed rate of interest) and because it causes people to devote resources to protect themselves from inflation
    Knowledge/skill statements
     1.Understands that inflation creates uncertainty
     2.Knows that inflation affects different groups differently
     3.Knows that an example of how inflation affects different groups is inflation hurts people on fixed incomes, but helps people who have borrowed money at a fixed rate of interest
     4.Understands that inflation causes people to devote resources to protect themselves from it
   Benchmark 7.Knows that inflation occurs (and/or employment increases) when money supply or desired expenditures for consumption, investment, government spending, and net exports are greater than the value of a nation’s output of final goods and services, and vice versa (i.e., inflation decreases when these expenditures are less than the value of output)
    Knowledge/skill statements
     1.Knows the causes of inflation
     2.Knows how a nation’s money supply and expenditures affect inflation
     3.Understands how inflation is measured
     4.Knows examples of nations desired expenditures
     5.Knows that inflation decreases when expenditures are less than the value of output
   Benchmark 8.Understands that government policies designed to reduce unemployment (e.g., increasing federal spending, reducing taxes) may increase inflation, and vice versa
    Knowledge/skill statements
     1.Understands how government policies designed to reduce unemployment affect inflation
     3.Knows that increasing federal spending is an example of a government policy designed to reduce unemployment
     4.Knows that reducing taxes is an example of a government policy designed to reduce unemployment