Lesson Plan

• Define the money supply and identify its main aggregates (M₀–M₃).
• Explain how liquidity differs across the aggregates.
• Describe the step‑by‑step process used by central banks to measure the money supply.
• Analyse the impact of changes in the money supply on inflation and interest rates.

• Projector or interactive whiteboard
• Slide deck with definitions and aggregate table
• Handout of the money‑aggregate chart
• Calculator or spreadsheet for aggregation exercise
• Whiteboard and markers
• Exit‑ticket slips

Start with a quick visual: “If we could count every dollar and cent in the country right now, what would that number look like?” Connect to students’ prior knowledge of cash and bank deposits, then state that by the end of the lesson they will be able to write a concise definition of the money supply and label its key aggregates.

1. Do‑now (5'): Short quiz on cash vs. deposit classifications.
2. Mini‑lecture (10'): Present the definition of money supply and walk through M₀–M₃ with slides.
3. Guided practice (10'): Students classify a list of assets into the correct aggregate.
4. Group activity (15'): Using provided data, compute total money supply for each aggregate in a spreadsheet.
5. Think‑pair‑share (5'): Discuss why accurate measurement matters for monetary policy.
6. Check for understanding (5'): Exit‑ticket question – “Write the definition of the money supply in your own words and give one example of an M₂ component.”

Summarise the definition and the aggregation process, highlighting how each aggregate feeds into policy decisions. Collect exit tickets as a retrieval check and assign homework: read the textbook section on monetary policy and prepare a brief paragraph linking money‑supply changes to interest‑rate movements.