Lesson Plan

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Lesson Plan
Grade: Date: 25/02/2026
Subject: Economics
Lesson Topic: full employment level of national income and equilibrium level of national income: inflationary and deflationary gaps
Learning Objective/s:
  • Describe the circular flow of income and its main components.
  • Explain the concepts of full‑employment and equilibrium national income.
  • Distinguish between inflationary and deflationary gaps and identify their causes.
  • Calculate the size of a gap using the multiplier and determine the required fiscal adjustment.
  • Evaluate how fiscal and monetary policies can be used to close each type of gap.
Materials Needed:
  • Projector or interactive whiteboard
  • Slide deck with circular flow diagram and gap tables
  • Handout worksheet with gap calculation exercises
  • Calculator or spreadsheet software
  • Whiteboard markers and flip chart
 Introduction:
Begin with a quick poll: “When you hear ‘full‑employment’, what does that mean for the economy?” Connect to prior learning on aggregate demand and supply. Explain that today’s success criteria are to identify gaps between equilibrium and potential output and to propose appropriate policy responses.
Lesson Structure:
  1. Do‑now (5’) – students answer a short quiz on the circular flow model displayed on the board.
  2. Mini‑lecture (10’) – review the national income identity, full‑employment and equilibrium concepts using slides.
  3. Guided practice (12’) – work through the inflationary‑gap example and calculate ΔA together.
  4. Group activity (15’) – each group receives a scenario (inflationary or deflationary gap) and determines appropriate fiscal and monetary measures; record answers on the worksheet.
  5. Class discussion (8’) – groups present solutions; teacher highlights policy trade‑offs.
  6. Check for understanding (5’) – exit ticket: write one sentence defining an inflationary gap and one policy to close it.
Conclusion:
Summarise that gaps arise when equilibrium output diverges from potential output and that policy can shift aggregate demand to restore balance. Collect the exit tickets as a quick retrieval check. Assign homework: complete a worksheet calculating gaps for a new data set and justify the chosen policy.