Analyzing Economic Issues (CIA4U)

Name: __________________

Money
Unit 7 Outline
Introduction
This unit introduces students to the
centrality of money in understanding
the national economy. Students will
examine the roles, types, and prices of
money. The difference between real
and nominal values will be stressed
along with an understanding of the
standard relationships between money
and important economic variables like
GDP, unemployment, and standard of
living. Students will also learn about the
roles and functions of commercial banks
in conjunction with the central bank in
national money management.

Big Questions
The main overarching question of this course is: How do individuals and societies make sense of
and assess economic information to make decisions?

By the end of this unit, you will be able to answer the following questions:

1. How do we measure money’s value?

2. How does money affect the economy?
3. How is money managed by the private and public sectors?

Assessment and Evaluation

Assessment for Learning Assessment of Learning Assessment as
(Formative) (Summative) Learning (Formative)
 Mind Map  Unit Test  Diagnostic
 Newspaper Analysis Worksheet
 Unit Quest (Google Form)  Teacher-Student
 Morton Workbook conferences
Activities
*See Learning Goals and Success Criteria Checklist at the end of this outline for more
information about our learning targets for this unit.*
 Analyzing Economic Issues (CIA4U)
Name: __________________

Key Terms, Concepts and Skills

Graphing & Numeracy Skills
1. Calculate the difference between real and nominal values.
2. Calculate the simple money multiplier.
3. Calculate using a simple T-Account, the growth of banking demand deposits and its
impact on the money supply, primary and secondary loans, and the reserve ratio.
4. Graph and interpret shifts in the market for loanable funds and the money market
(equilibrium analysis).

Key Vocabulary

Currency in circulation Functions (Medium of Exchange, Real Value

Store of Value, Unit of Measure)
MI Barter Nominal Value
M2 Double Co-incidence of Wants Price of money (relative to goods,
time, and other currencies)
Demand Deposits Types (Commodity, Commodity- Interest rate, Exchange rate
backed, Fiat) Purchasing Power
Time value of money Velocity of money GDP deflator

More vocabulary!

Commercial Banks Central Bank (Federal Money Supply

Reserve)
Market for Loanable Funds Reserve Ratio Money Demand
Open Market Operations
Reserve Ratio Appreciation Money Market
Simple Money Multiplier Depreciation Inflation (Deflation,
hyperinflation, stagflation,
disinflation)
Discount Rate (Bank Rate) Federal Funds Rate (Overnight Prime Rate
Rate)

Unit 7: Money (Lesson Thread)

Flow of Content
Value of Money (Types, Functions, Prices, Nominal vs. Real Values)
Money and the Economy (Purchasing Power, Interest Rate, Exchange Rate, Money Market)
Money and Banks (Role, Financial System, T-Account (Balance Sheet), Simple Money
Multiplier (Reserve Ratio, Demand Deposits, Excess Reserves)
Monetary Policy (Role, Tools, Reserve Requirements, Open Market Operations, Foreign
Currency Reserves, Monetary Policy transmission (direct and indirect), Effects on Aggregate
Demand and Supply)
 Analyzing Economic Issues (CIA4U)
Name: __________________

Pre-Learning Assessment

1) How do we measure money’s value?

Pre-Learning (What do you think you Curiosity (What questions do you have?)
know?)

Post-Learning (What do understand now?)

I used to think/understand ______________ about money’s value. I now think/understand

_____________ because ____________________.
 Analyzing Economic Issues (CIA4U)
Name: __________________

2) How does money affect the economy?

Pre-Learning (What do you think you Curiosity (What questions do you have?)
know?)

Post-Learning (What do understand now?)

I used to think/understand ______________ about money’s influence on the economy. I now

think/understand _____________ because ____________________.
 Analyzing Economic Issues (CIA4U)
Name: __________________

3) How is money managed by the private and public sectors?

Pre-Learning (What do you think you Curiosity (What questions do you have?)
know?)

Post-Learning (What do understand now?)

I used to think/understand ______________ about money managment on the economy. I

now think/understand _____________ because ____________________.
 Analyzing Economic Issues (CIA4U)
Name: __________________

Learning Goals and Success Criteria Checklist

LEVEL of SUCCESS CRITERIA ACCOMPLISHED

UNDERSTANDING
How do we measure money’s value?
Idea(s) I can define the functions and types of money.

I can define M1 & M2.

I can explain how a monetized economy solves the problem of

satisfying a double co-incidence of wants and the need for barter.

I can explain the three (3) prices of money in an economy.

I can explain the difference between real and nominal values in an

economy.
Relating Ideas I can calculate the difference between real and nominal values and
explain their significance.

I can compare and contrast the significance of the three (3) prices of
money and how they influence and are influenced by changes of the
money supply.

I can compare the components of national output and evaluate the

relative importance of each to a nation’s economic performance.

I can relate the influence of money to output and apply the model of
Aggregate Demand and Supply.
Extending Ideas I can critique and extend my understanding of money to include
recent economic and technological trends like the introduction of
digital currencies (i.e. Bitcoin) and e-commerce.

I can make meaningful connections between what I’ve learned about

the money to other subjects and the world around me.
How does money affect the economy?
Idea(s) I can explain why consumers hold money.

I can describe the determinants and shift factors that affect money
demand and money supply in an economy.

I can explain the determinants and shift factors that affect the supply
and demand for foreign currency.
 Analyzing Economic Issues (CIA4U)
Name: __________________

I can define purchasing power and explain the effects of changes in

the aggregate price level on consumption and investment
expenditures.

I can define inflation and its related concepts and explain sources of
changes in the aggregate price level.

Relating Ideas I can analyze the effects of shifts in money demand and supply on an
economy’s nominal interest rate.

I can interpret and explain the effects of shifts in the supply and
demand for foreign currency on the exchange rate.

I can analyze the effects of changes in the aggregate price level on

purchasing power and its effects on a variety of economic
stakeholders (consumers, savers, businesses, government, banks,
retirees, borrowers, etc…)
Extending Ideas I can evaluate the effects of changes in the three (3) prices of money
on the economy.

I can make meaningful connections between what I’ve learned about

the effects of money on the economy to the current state of the
Canadian economy and our previous unit (business cycle & output).
How is money managed by the private and public sectors?
Idea(s) I can define the role and purpose of the central and commercial
banks.

I can explain how commercial banks “create money”.

I can define the simple money multiplier.

I can define the differing rates of interest charge in the economy (i.e.
discount, federal funds, and the prime rates).

I can list and explain the tools of monetary policy.

I can define and explain the determinants of the supply and demand
for loanable funds.

I can explain the direct and indirect transmission process of

monetary policy.
Relating Ideas I can calculate changes in the money supply using the simple money
multiplier.
 Analyzing Economic Issues (CIA4U)
Name: __________________

I can analyze a commercial bank’s T-Account (balance sheet) to

understand the influence of changes in demand deposits and the
reserve requirements on primary and secondary loans.

I can analyze shifts of demand and supply for loanable funds on the
real interest rate.

I can explain the effects of changes of the real interest rate on

economic growth and policy.

I can analyze the effects of contractionary and expansionary

monetary policy on nominal interest rates, investment demand,
output (AS/AD), and the value of a country’s currency (exchange
rate).
Extending Ideas I can engage in the debate around differing opinions about the
appropriate role of the central bank and monetary policy.

I can make meaningful connections between what I’ve learned about

the money management on the economy to the current state of the
Canadian economy (business cycle & output).