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Money, Banking & Inflation

Students explore how money works — its functions, the role of banks and interest, why prices rise through inflation, and how a central bank steers the whole system to keep the economy stable.

Grade 12Macroeconomics55 minutes1 class periodC3 InquiryExplicit teaching4 StandardsC3 + CCSS
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Lesson at a Glance

Everything you need before the bell rings

Learning Objectives

Students will be able to…

  • ✓Explain the functions of money.
  • ✓Explain the role of banks and interest.
  • ✓Explain inflation.
  • ✓Explain the central bank.
Essential Question

A dollar is just paper — yet it runs the world. What makes money valuable, why do prices keep rising, and who keeps the whole system stable?

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Lesson Phases
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Vocabulary Terms
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Standards Aligned
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Interactive Task
Money Explorer · Interactive

The Money Explorer

Project this and tap each idea. Have students connect money, banking, interest, inflation, and the central bank.

💵 Explore money, banking & inflation — tap eachTry it

The Lesson · C3 Inquiry Arc (Question · Investigate · Conclude)

55 minutes, five moves

Tap any phase to open the teacher moves and student actions.

1

Compelling Question — Just Paper?

5 min

A dollar is only paper — so what makes it valuable?

👩‍🏫 Teacher Moves

  • Ask what gives money value.
  • Note prices rise over time.
  • Pose the question.

🎒 Student Actions

  • Consider money.
  • Notice rising prices.
  • Predict the idea.
2

Investigate — Explore Money

12 min

Students investigate.

👩‍🏫 Teacher Moves

  • Send students to the Money Explorer.
  • Record each idea.
  • Note how banks and interest work.

🎒 Student Actions

  • Tap each one.
  • Record it.
  • Explain banks.
3

Analyze — Banking & Inflation

13 min

Students analyze.

👩‍🏫 Teacher Moves

  • Explain money’s functions.
  • Explain banks and interest.
  • Explain inflation and the central bank.

🎒 Student Actions

  • Explain money.
  • Explain banks.
  • Explain inflation.
4

Draw Conclusions — Draw Conclusions

15 min

Students conclude.

👩‍🏫 Teacher Moves

  • Explain how inflation affects people.
  • Explain how interest rates are used.
  • Support with evidence.

🎒 Student Actions

  • Explain inflation.
  • Explain rates.
  • Use evidence.
5

Take Informed Action — The Cost of Living

5 min

Students take action.

👩‍🏫 Teacher Moves

  • Compare prices over decades.
  • Explain purchasing power.
  • Hand out the exit ticket.

🎒 Student Actions

  • Compare prices.
  • Explain power.
  • Complete the exit ticket.
Standards Alignment

Built to the standards you report on

Aligned to the C3 Framework for Social Studies (Grades 9–12) and Common Core literacy in history/social studies.

C3
D2.Eco.12.9-12

Evaluate the selection of monetary and fiscal policies in various economic conditions.

C3
D2.Eco.10.9-12

Use data to explain how changes in the money supply influence economic activity.

C3
D2.Eco.13.9-12

Explain why standards of living rise as productivity improves.

CCSS
RI.11-12.4

Determine the meaning of words and phrases, including technical terms.

Differentiation

One lesson, every learner

Multilingual Learners

ELL / EMERGING READERS
  • Money-function picture cards.
  • Sentence frame: “Inflation means prices ___.”
  • Compare old and new prices.

Support & Access

IEP / 504
  • Focus on money and inflation.
  • Use concrete price examples.
  • Match term to meaning.

Stretch & Extend

GIFTED / EARLY FINISHERS
  • Explain how central banks fight inflation.
  • Analyze real inflation data.
  • Explain compound interest.
Materials

What to gather

  • 📽️Projector / board
  • 📓Notebooks
  • 💻The Money Explorer
  • 📊Inflation data
  • 🧮Calculators
  • 🎫Exit-ticket slips
Vocabulary

Key terms — hover for a quick definition

moneya medium of exchange, store of value, unit of accountbankan institution that safeguards and lends moneyinterestthe cost of borrowing or reward for savinginflationa general rise in prices over timepurchasing powerhow much money can buycentral banka bank that manages a nation’s money supplymoney supplythe total money in an economydeflationa general fall in prices
Evaluate

Exit Ticket

Preview the three formative checks. Tap “Sample answer” to see what mastery looks like — hide them before you print for students.

QUESTION 1
What are the three functions of money?
A medium of exchange, a store of value, and a unit of account.
QUESTION 2
What is inflation, and how does it affect money?
A general rise in prices over time — it reduces money’s purchasing power (each dollar buys less).
QUESTION 3
What does a central bank (like the Federal Reserve) do?
It manages the nation’s money supply and interest rates to help keep the economy stable.

Going deeper? Fighting inflation.

Have students explain how a central bank can raise interest rates to slow inflation, and the trade-offs of doing so. A printable money sheet is in the Social Studies library.

Study · Flashcards

Study the key terms

Tap a card to flip it, then rate whether you knew it. Built from this lesson’s vocabulary.

🃏 Money, Banking & InflationFlip
Card 1
Term
Tap to flip →
Meaning
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Practice · Quiz

Check your understanding

A quick self-check with instant feedback, drawn from this lesson’s key terms.

📝 Money, Banking & InflationQuiz
Score: 0
1 / 6
Question 1
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Practice · Worksheet

Printable worksheet

A print-and-go review sheet with a built-in answer key. Tap “Show answer key” to reveal answers, or print the clean version for students.

🖨️ Money, Banking & InflationPrint
Name: ________________________
Date: ____________

Part A · Write the word that matches each meaning

Word bank: bank, central bank, deflation, inflation, interest, money, money supply, purchasing power
  1. a general fall in prices
  2. how much money can buy
  3. the cost of borrowing or reward for saving
  4. a bank that manages a nation’s money supply
  5. a medium of exchange, store of value, unit of account
  6. an institution that safeguards and lends money
  7. a general rise in prices over time
  8. the total money in an economy

Part B · Show what you learned

  1. What are the three functions of money?
  2. What is inflation, and how does it affect money?
  3. What does a central bank (like the Federal Reserve) do?
Answer key — Part A: 1) deflation · 2) purchasing power · 3) interest · 4) central bank · 5) money · 6) bank · 7) inflation · 8) money supply
Part B: 1) A medium of exchange, a store of value, and a unit of account. 2) A general rise in prices over time — it reduces money’s purchasing power (each dollar buys less). 3) It manages the nation’s money supply and interest rates to help keep the economy stable.