According to Kennedy (2000), the difference between real and nominal interest rates constitutes the most important concept taught in macroeconomics courses. The classroom exercise described in this article demonstrates one way in which real and nominal interest rates differ, namely in their...

<title>Abstract</title> In this classroom experiment, students develop a price index based on candy-purchasing decisions made by members of their class. They use their index to practice calculating inflation rates and to consider the strengths and weaknesses of the consumer price index (CPI). Instructors can...

Teaching Innovations in Economics presents findings from the Teaching Innovations Program (TIP) funded by the National Science Foundation. The six-year project engaged economics professors in the use of interactive teaching in undergraduate economics courses. Each chapter offers an insightful...

The International Handbook on Teaching and Learning Economics provides a comprehensive resource for instructors and researchers in economics, both new and experienced. This wide-ranging collection is designed to enhance student learning by helping economic educators learn more about course...

In a classroom experiment, students represent banks that borrow or lend in the federal funds market. As students negotiate loans with each other, they see how Federal Reserve open market operations affect the interest rates on their loans. Participating in the experiment vividly demonstrates why...

Three deposit insurance schemes are studied in a version of the Diamond-Dybvig banking model with a risky technology. The schemes include a full deposit guarantee and two alternatives which people have suggested as ways to limit the moral hazard problem of deposit insurance: deductible and...