Consumer Price Index (CPI): A Measure of Inflation: Financial Literacy and Math Lesson

This financial literacy lesson uses information from Canada’s Consumer Price Index.

Students:

- watch a video and take notes to learn what the Consumer Price Index is, how it is calculated, and what it is used for

- learn how to do a simplified inflation calculation (no compounding): This involves order of operations, fractions, division, and percentages written in decimal form

- calculate inflation on a practice weighted ”basket” of goods

- calculate the true inflation on eight everyday items since 2019: using the internet to check the current year's prices

This lesson could easily work in American classrooms too, as the concepts are the same. Just ask your students to research prices in Canada (online) when doing the comparison to maintain consistency.

Math Skills Required: Students need to understand percentages written as decimals. The calculations involved require subtraction and division and can be done with a calculator.

Answer Key Included

Grades to Use With:

This lesson is designed to be accessible to students in any high school math, life skills, business, or economics class.

It also could be used in grade 7 to address proportional relationships, ratios, and percentages.

Standards:

CCSS7.RP.A.3

Use proportional relationships to solve multistep ratio and percent problems. Examples: simple interest, tax, markups and markdowns, gratuities and commissions, fees, percent increase and decrease, percent error.

CCSSMP4

Model with mathematics. Mathematically proficient students can apply the mathematics they know to solve problems arising in everyday life, society, and the workplace. In early grades, this might be as simple as writing an addition equation to describe a situation. In middle grades, a student might apply proportional reasoning to plan a school event or analyze a problem in the community. By high school, a student might use geometry to solve a design problem or use a function to describe how one quantity of interest depends on another. Mathematically proficient students who can apply what they know are comfortable making assumptions and approximations to simplify a complicated situation, realizing that these may need revision later.

6 Page PDF:

Title Page

3 Page Student Worksheet: note-taking, practice basket calculation, and real inflation calculation

2 Page Answer Key