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This Lesson Plan Is from the Council for Economic Education's Publication This lesson plan is from the Council for Economic Education's publication: Focus: Understanding Economics in Civics and Government To purchase Focus: Understanding Economics in Civics and Government, visit: http://store.councilforeconed.org/civics-and-government.html Or, use the order form at the end of the lesson. For more economic and personal finance lesson plans, visit: http://store.councilforeconed.org To learn more about the Council for Economic Education, visit: http://www.councilforeconed.org You have permission to use and share this lesson plan, as long as you make no changes or edits to its contents or digital format. You can post this, email this, print this, share with your colleagues and pass it along for free to anyone you like. If you post it to a website or intranet, please provide the following attribution: Courtesy of the Council for Economic Education. For more economic and personal finance lesson plans, visit http://store.councilforeconed.org LESSON 8 ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS FOCUS:UNDERSTANDING ECONOMICS IN CIVICS AND GOVERNMENT © COUNCIL FOR ECONOMIC EDUCATION,NEW YORK,NY 99 LESSON 8 ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS INTRODUCTION CONTENT STANDARDS Many factors influence voters as they Economics (CEE Standards) decide how they will vote. The economic • Costs of government policies sometime policies advocated by candidates and political exceed benefits. This may occur because of parties are important factors in these deci- incentives facing voters, government offi- sions. No matter what policies a presidential cials, and government employees, because candidate may propose, however, an incum- of actions by special interest groups that bent candidate is often blamed for or credited can impose costs on the general public, or with how well the economy is doing, whether because social goals other than economic or not the incumbent’s policies were actually efficiency are being pursued. (Standard 17) the cause of the condition in question. Many voters base their decisions narrowly on how • Unemployment imposes costs on individu- the nation’s economy is affecting them at the als and nations. Unexpected inflation time. Therefore, in a presidential campaign in imposes costs on many people and benefits which an incumbent is vying for re-election, some others because it arbitrarily redis- certain key measures of economic performance tributes purchasing power. Inflation can can help to predict the election outcome. This reduce the rate of growth of national living lesson shows how two economic measures, the standards, because individuals and organi- Misery Index and the growth rate in real GDP zations use resources to protect them- per capita, can be used to make predictions selves against the uncertainty of future about presidential elections. prices. (Standard 19) Civics and Government (NSCG LESSON DESCRIPTION Standards, 9-12) The students examine economic data in • Students should be able evaluate, take, order to predict the results of presidential and defend positions about the roles of elections. political parties, campaigns, and elections in American politics. (III. E. 4) CONCEPTS • Inflation • Students should be able to evaluate, take and defend positions about the means that • Misery Index citizens should use to monitor and influ- • Real GDP ence the formation and implementation of public policy. (V. E. 3) • Real GDP per capita • Unemployment TIME REQUIRED 60 minutes, plus time for the students to • Voting and elections complete Activity 8.1 as homework OBJECTIVES MATERIALS Students will be able to: • A copy of Activity 8.1, 8.2, and 8.3 for each 1. Identify economic conditions likely to student influence voter opinion. • A transparency of Visuals 8.1, 8.2, and 8.3 2. Examine economic data to make predic- tions about presidential elections. 100 FOCUS:UNDERSTANDING ECONOMICS IN CIVICS AND GOVERNMENT © COUNCIL FOR ECONOMIC EDUCATION,NEW YORK,NY ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS LESSON 8 PROCEDURE energy, and educational policy] also have 1. Tell the students that in a future class economic implications.) By reference to period they will be considering economic the economic issues listed, emphasize the factors that influence the outcomes of point that the state of the economy weighs presidential elections. In order to do this heavily in voters’ minds as they decide as accurately as possible, they will need to which candidate to support. Quote the old collect information from someone who is of political adage, “People tend to vote their voting age (18 years or older). pocketbooks.” 2. Give each student a copy of Activity 8.1. 5. Ask the students: Do you think the Assign the students to collect the informa- economy is in good shape today? (Accept tion called for from one person of voting any answer.) Press further: What data do age. Set a due-date for completion of the you use to support your answer? (Many task, and clarify the directions as neces- answers are possible, but be sure to steer sary. The person from whom the informa- the discussion toward measures of the tion is collected does not need to be a unemployment rate, the inflation rate, and member of the student’s household. real GDP as important determinants of Parents, guardians, relatives, neighbors, the current state of economic activity. As co-workers, friends—all can serve as sub- necessary, explain that GDP is a measure jects for this interview. And even if the of overall production, inflation measures next presidential election is far off, it is the percentage change in average prices, important that the interviewees identify and the unemployment rate captures the the issues that are, will be, or have been percentage of those who are working or most important to them when considering wish to work but cannot currently find a which candidate to support for president. job.) This activity is not intended to determine 6. Display Visual 8.1. Use it to explain that whether or not a person has voted in an some economic indicators are especially election (or for whom she or he voted). important in predicting election results. Instead, it is designed to help students In particular, growth in real GDP per capi- identify issues that are important to ta—growth in the value of final goods and adults of voting age. services produced per person—is an impor- 3. Collect the students’ completed forms from tant indicator of whether an incumbent Activity 8.1 and organize the responses for president (or the candidate from the use during a forthcoming class period. As incumbent party) will be reelected. The you review the responses, highlight com- growth in real GDP per capita is found by mon answers and central tendencies that dividing real GDP for each year by the stand out. When you resume work on the country’s population and then finding the activity with the class, write these com- percentage change from one year to the mon answers on the board, with notations next. A second indicator, the Misery Index, to show the number of times each was also can be used to predict an election mentioned in responses to Activity 8.1. result. In any given year, the Misery Index is the sum of the inflation rate and unem- 4. Call on the students to comment on the ployment rate. As the name of the Misery election issues you have listed on the Index implies, high rates of unemployment board. How many of these are economic and/or high inflation rates can cause issues? (Answers will vary, but several eco- economic misery. Economic misery usually nomic issues [e.g., unemployment, inflation, means trouble for incumbent candidates. the federal budget deficit, income inequali- ty, tax policy, Social Security, trade policy, 7. Divide the class into groups of three or etc.] will likely appear on the list. Other four students. Distribute a copy of issues [e.g., the environment, immigration, Activity 8.2 to each student. Briefly FOCUS:UNDERSTANDING ECONOMICS IN CIVICS AND GOVERNMENT © COUNCIL FOR ECONOMIC EDUCATION,NEW YORK,NY 101 LESSON 8 ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS review the columns in the table. (Note: 10. Tell the students that they will now try to You may wish to update the table with predict who will win a presidential elec- current data. If you do so, note that this tion. More than that: They will try to cre- table uses annual data. Annual unem- ate a rule that can be used to make such ployment and inflation [using the predictions. They will begin by consider- Consumer Price Index] data can be found ing an example. Display Visual 8.2 and by searching the website www.bls.gov, discuss the rule that it proposes: “The while annual levels of real GDP per capita incumbent party usually wins if the can be found at the website www.bea.gov. growth rate of real GDP per capita is As noted above, the annual growth rate of greater than 0% during the year of the real GDP per capita can be computed by election.” Call on the students to check calculating the percentage change in the this rule against Table 8.2. How well does levels of this series, using “chained dol- the rule stand up to the data? (Not partic- lars,” from one year to the next).1 ularly well. While it predicts correctly all six of the incumbent wins, it is incorrect on 8. As you review the columns in Activity 8.2, six of the seven losses that were actually ask: registered. It yields a correct prediction for • What year since 1957 had the highest a loss only in 1980; it incorrectly predicts a unemployment rate? (1982) win for actual losses in 1960, 1968, 1976, 1992, 2000 and 2008. Overall, the rule cor- • What year had the highest inflation rectly predicts only 7 of 13 elections.) rate? (1980) 11.
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