German teaching activity in Italy

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Erasmus + project Nr. 2014-1-LV01-KA201-000431 „How to Make Education |Process Attractive to the Teenagers of the 21st Century”

Topic:

  • The circular flow of income in the economy and the financial crisis

Learning outcomes:

  • Students are able to explain what the different players in the economy do and what their jobs are

  • Students are able to explain how the different players in an economy interact with each other

  • Students are able to explain how the money flows within the economy and how an upward cycle works

  • Students are able to explain how an external shock (crisis) affects the economy

  • Students are able to name the correct terms for a circular flow of income and are able to attach the terms to the respective arrows

Nr.

 

Topic

Objectives of the activity

Steps of the activity

Materials needed for each step

Approximate timing of each step

1.

Warm-Up

Students reactivate prior knowledge.

Students know the general goals and the topic of the lesson.

  • Show headline of Flipchart “Players in the economy”

  • Asking students: “Who are players in the economy”

  • Help by saying “Where do your parents go to in the morning?”, “Who is actually producing things in an economy?”, “Who is providing money for investments?” and “Who is leading everything?”

Flipchart: Players in the economy

Students in circle

10

2.

Round 1 of the game

(guided by teachers)

Students learn the rules of the game.

Students play the game for the first time.

 

Preparation

1 student = bank, 1 student = government, 6 students = employed households, 4 students = unemployed households, 3 students = factories

Money endowment of factories: 72 “money” (= 1 bank note) each

Note:

It may be necessary to provide factories with extra money during the process in order for them to pay all the wages. This can be done by the teachers relatively freely.

Phases - explanation

  1. Production -> 6 students (2 for each factory = employed households) make cars out of Lego

  2. Payment of wages / salary -> factories pay salaries to workers (6 each)

  3. Consumption -> some workers buy cars (3 cars can be bought)

  4. Payment for consumption -> those workers who buy cars have to pay the 2 money to the factories (3 cars have to be paid)

  5. Tax -> every worker has to pay 2 money to the government

  6. Benefits/social welfare -> the state gives 1 money to each person who is out of work

  7. Savings-Paying into the bank account -> the workers can decide to put money in the bank

  8. Taking out a loan -> that money is used to give money to the factories from the bank

  9. Investment -> The factories build a new production facility for 10 money, there can be working 2 more people

Lego, play money, Flipchart: Phases

Students divided into four groups

15

3.

Round 2 of the game

(students by themselves)

Students can run the phases independently.

Students do the second round by themselves.

Lego, play money, Flipchart: Phases

Students divided into four groups

10

4.

Round 3 of the game

(shock)

Students understand how a crisis affects phases 3-9.

Students do the cycle themselves until the end of 3.2 (after “payment of wages”).

Phases (part I)

  1. Production

  2. Payment of wages / salary

Then the teachers kick in: Crisis comes up. Bad mood in the economy. Other phases are affected -> Discuss in each phase how!

Phases (part II)

  1. Consumption -> down

  2. Payment for consumption -> down

  3. Tax -> down

  4. Benefits/social welfare -> up (more unemployed)

  5. Savings-Paying into the bank account -> down

  6. Taking out a loan -> down

  7. Investment -> down

Lego, play money, Flipchart: Phases

Students divided into four groups

10

5.

Round 4 of the game

(post-crisis economy)

Students understand how a crisis affects phases 1 and 2.

After crisis economy”

Phases

  1. Production -> down

  2. Payment of wages / salary -> down

Ending of round 4: Bad consumption mood, fear of the future, unemployment rises rapidly

-> Uncertainty

Lego, play money, Flipchart: Phases

Students divided in four groups

5

6.

Theory, Summary, End

Students know the terminology of the circular flow of income.

Students can assign the terms to the different phases.

Teachers show flipchart “circular flow of income” without keywords. Students should label the arrows. In the end the students should summarize how the economy is affected in the different phases.

Flipchart: Circular Flow of Economy

Students in circle

10

 

Flipchart: Players in the economy

Flipchart: Phases

Flipchart: The circular flow of income