Task Force: Combating Inflation
The inflation rate is rising more rapidly than economists agree is beneficial. You have been assigned to try and help the United States federal government combat rising inflation.
Why Are We Doing This?
Inflation is, “…a measure of the rate of rising prices of goods and services in an economy.” During a period of inflation, the amount of money required to purchase goods and services increases, while the amount of goods and services money can buy decreases. Here, we ask you to try and think about a detailed plan for how the government should approach the issue of inflation.
- Before you begin, research some information about inflation:
- What are THREE possible reasons inflation could be occurring?
- What are some benefits of inflation?
- What are the drawbacks of it?
- What are some past solutions aimed at dealing with inflation? Did they work? Why or why not?
- What are the different mechanisms that the government uses to combat inflation?
- Read this article: https://www.economicshelp.org/blog/634/economics/the-problem-with-printing-money/
- Do you think simply printing more money can solve the issue?
- Then, try to design a plan for the United States to fight inflation
- What methods of combating inflation do you think will be most effective and least harmful?
- Will printing more money be part of your plan? Why or why not?
- How will you deal with any potential downsides of your plan?
- How will you convince the public that your plan will work?
- Think through the possible objections about your plan that someone might have.
- Share with the group and see if you can convince them that your plan will successfully fight inflation in the country.
Things to Keep in Mind:
- You do not have to come up with an exhaustive list of guidelines for your plan. Focus on a few you are prepared to defend.
- Your plan should be something that the government could realistically implement.