2. Economics: Inflation

Subject: Economics

Resource type: Lesson

Skills: Problem Solving, Staying Positive

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The Tale of Sophia and Inflation: In this activity, students become sole traders who need to assess the impact of inflation on purchasing in order to make informed decisions for their business. Access our comprehensive resource package, including detailed teacher notes, PowerPoint, student worksheet and answer sheet. Adapt to your classroom’s needs for a dynamic learning experience.

Scenario

The UK economy has been experiencing a cost of living crisis since late 2021. This has contributed to significantly high rates of inflation in the UK. In October 2022, the UK’s inflation rate was at 11.1%. Sophia is a sole trader on a popular ecommerce website. She sells cards and gifts. The cost of living crisis has contributed to a significant rise in costs of production. Additionally, Sophia’s business has been affected by the limited supply chains. These issues have predicted price changes for the future. Sophia has to make a huge decision on whether she buys her raw materials in bulk now or wait, taking into consideration whether inflation would continue to rise or fall.

Learning Aim

To be able to understand price stability and inflation and how it is measured; and analyse the causes and consequences of inflation.

Skills Builder Links

Problem solving step 5
I explore problems by thinking about the pros and cons of possible solutions.

Staying positive step 7
I look for opportunities in difficult situations.

Curriculum Table

England: The national curriculum (England)	The role of government Students must know and understand price stability and inflation and how it is measured; causes and consequences of inflation.
Scotland: The National 5 Business Management	UK economic activity Government aims – inflation – definition and measurements; causes of inflation; effects of inflation on individuals, firms and the economy.
Wales: WJEC GCSE in business specification	Currently, there is no WJEC GCSE economics qualification available. WJEC only provides Economics at A-Level.