Lesson Plan

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Lesson Plan
Grade: Date: 17/01/2026
Subject: Economics
Lesson Topic: autonomous and induced investment; the accelerator
Learning Objective/s:
  • Define autonomous and induced investment and explain their roles in the investment function.
  • Derive and apply the accelerator equation I = Iₐ + vΔY.
  • Analyse how the multiplier and accelerator interact to amplify changes in national income.
  • Evaluate policy measures that affect autonomous investment and the accelerator effect.
Materials Needed:
  • Projector and screen for slides/diagrams
  • Whiteboard and markers
  • Handout summarising investment functions and accelerator diagram
  • Calculator or spreadsheet for simple numerical examples
  • Sticky notes for group activity
 Introduction:
Imagine a factory that must buy extra machines because demand suddenly spikes. Students already know the circular flow model and the basic Keynesian multiplier, so we’ll build on that foundation. By the end of the lesson they will be able to write the total investment function and explain how output changes drive further investment. Success will be shown when they can link a change in autonomous spending to a chain‑reaction of induced investment.
Lesson Structure:
  1. Do‑now (5'): quick recall quiz on circular flow and multiplier (paper).
  2. Mini‑lecture (10'): define autonomous vs. induced investment; present I = Iₐ + αΔY.
  3. Guided derivation (10'): derive the accelerator equation I = Iₐ + vΔY using a constant capital‑output ratio.
  4. Group activity (15'): calculate induced investment for given ΔY and v, fill a multiplier‑accelerator table, discuss results.
  5. Whole‑class discussion (10'): policy implications – fiscal stimulus, interest‑rate changes, stabilisation.
  6. Check for understanding (5'): exit ticket – one sentence explaining how a rise in government spending can trigger further investment.
Conclusion:
We will recap the definitions of autonomous and induced investment, the accelerator formula, and the multiplier‑accelerator feedback loop. Students will hand in their exit tickets and receive a brief verbal summary. For homework, they will complete a worksheet that applies the multiplier‑accelerator model to new numerical scenarios.