Lesson Notes By Weeks and Term - Senior Secondary 2

Term: 3^rd Term

Week: 8

Class: Senior Secondary School 2

Age: 16 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Economics

Topic:-       Causes, effects and control of inflation

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

1. Explain various causes of inflation in west Africa

 

2. Identify the effects of inflation

 

3. Explain how inflation can be controlled.

 

4. Define monetary policy

 

5. Define physical control

 

6. Define fiscal policy

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

PRESENTATION	TEACHER’S ACTIVITY	STUDENT’S ACTIVITY
STEP 1 INTRODUCTION	The teacher reviews the previous lesson on inflation	Students pay attention
STEP 2 EXPLANATION	She explains various causes of inflation in west Africa and Identifies the effects of inflation. She explains how inflation can be controlled. .	Students pay attention and participates
STEP 3 DEMONSTRATION	She defines monetary policy, physical control and fiscal policy	Students pay attention and participate
STEP 4 NOTE TAKING	The teacher writes a summarized note on the board	The students copy the note in their books

 

NOTE

CAUSES OF INFLATION IN WEST AFRICA

 

1. Excessive deficit financing and rapidly increasing government expenditure: There is deficit–financing by the government if it spends more money than it receives through tax and other sources.

 

2. Excessive bank lending: Excessive creation of bank credits increases the supply of money. If the increased supply of money is not matched by the corresponding increase in goods and services, price will rise. If it persists, inflation will result.

 

3. Increases in wages and salaries of workers

 

4. Low domestic productivity in both the industrial and agricultural sectors Poor storage facilities

 

5. Population explosion

 

6. War and civil strife in some west African countries

 

7. The great reliance on imported items by many countries as a result of low domestic production could lead to imported inflation

 

8. Higher cost of production

 

9. Reduction of imports

 

 

EFFECTS OF INFLATION

1. There will be increased employment

 

2. Borrowers and those who pay rents and fixed interest charges gain, that is, there is a transfer of real earnings from the creditors to debtors

 

3. Inflation redistribution incomes

 

4. It leads to increased earnings and higher profits on the parts of business men There will be increased investment

 

5. Inflation may lead to an adverse balance of payments. During inflation, increase in domestic prices affect the prices of exports

 

6. Inflation discourages savings

 

7. It leads to the loss of confidence in the country’s currency

 

 

CONTROL OF INFLATION 

The three major ways of controlling inflations are:

1. The use of fiscal policy
2. The use of monetary policy
3. The use of physical control

 

THE USE OF FISCAL POLICY

1. A fiscal policy involves the use of government tax (income) and expenditure policies to regulate the economy. It includes the following;
2. Taxation policy: Government could increase taxes on income
3. Government expenditure policies: Inflation could be controlled by reduction of Government expenditure and use of budget surplus
4. Government could increase its borrowing from the public and at the same time spend less of its revenue

 

THE USE OF MONETARY POLICY

This type of policy is used by the central banks to reduce lending by commercial banks, thereby reducing the amount of money in circulation. A monetary policy which reduces the supply of money involves

1. Increasing the bank rate
2. Increasing the cash-deposit ratio
3. The use of open market operations
4. The use of special deposits
5. The use of directives, moral suasion and funding

THE USE OF PHYSICAL CONTROLS

This involves the following:

1. Rationing: A maximum quantity of a commodity which can be bought is assigned to each consumer
2. The policy of wage freeze: The government will place embargo on calls for increased wages and salaries and strikes may be banned.
3. Price control: This is the act of fixing the maximum prices of goods and services.
4. Wages may also be controlled

EVALUATION:

1. Explain various causes of inflation in west Africa

 

2. Identify the effects of inflation

 

3. Explain how inflation can be controlled.

 

4. Define monetary policy

 

5. Define physical control

 

6. Define fiscal policy

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively