Lesson Plan

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Lesson Plan
Grade: Year 12 (A‑Level) Date: 17/01/2026
Subject: Economics
Lesson Topic: national income determination using AD and income approach with the multiplier process
Learning Objective/s:
  • Describe the circular flow of income and identify the key sectors and flows.
  • Explain the aggregate‑demand and income‑approach equations for national income.
  • Derive the simple expenditure multiplier and the extended tax, import and combined multipliers.
  • Apply the multiplier to a fiscal‑policy change and interpret the resulting change in equilibrium income.
  • Evaluate how marginal propensities (MPC, MPT, MPM) influence the size of the multiplier.
Materials Needed:
  • Projector and screen
  • PowerPoint slides with circular‑flow diagram
  • Printed handouts of the diagram and multiplier worksheet
  • Calculators
  • Whiteboard and markers
  • Exit‑ticket slips
 Introduction:
Imagine the government injects £20 bn into the economy – what happens to total output? Students will recall the components of aggregate demand and the marginal propensity to consume from the previous lesson. By the end of class they will be able to derive and use the multiplier to estimate the impact of such a fiscal change.
Lesson Structure:
  1. Do‑now (5'): Quick quiz on AD components and factor incomes.
  2. Mini‑lecture (10'): Review the circular flow and link it to the AD and income approaches.
  3. Derivation activity (15'): Guided algebra on the board to obtain the simple expenditure multiplier.
  4. Extension stations (10'): Small groups calculate tax, import and combined multipliers using given propensities.
  5. Application problem (10'): Policy scenario – increase G by £20 bn; compute ΔY with the appropriate multiplier.
  6. Check for understanding (5'): Exit ticket – one sentence explaining why the multiplier is greater than 1.
  7. Summary & questions (5'): Recap key steps and clarify any doubts.
Conclusion:
We revisited the circular flow, confirmed that the AD and income approaches yield the same national income, and demonstrated how the multiplier amplifies fiscal injections. Students hand in an exit ticket summarising the multiplier’s intuition and are assigned the worksheet on multiplier calculations plus the textbook chapter on national‑income accounting for homework.