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🎓 High School Financial Literacy Lesson Plan: Gresham, Cantillon, and Pareto Effect.

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🎓 High School Financial Literacy Lesson Plan

Title: Why Money Moves the Way It Does: Gresham, Cantillon, and Pareto Explained Grade Level: 11–12 Subject: Financial Literacy / Economics Duration: 90 minutes (block schedule or split into two 45-minute periods)



🧠 Lesson Objectives

By the end of this lesson, students will be able to:

  1. Define and explain Gresham’s Law, the Cantillon Effect, and the Pareto Principle.

  2. Analyze how these economic principles apply to real-world situations (inflation, monetary policy, wealth inequality).

  3. Connect these concepts to personal financial decision-making (e.g., savings, investing, entrepreneurship).

  4. Apply critical thinking to historical and current events through the lens of economic behavior.



📜 Key Vocabulary

  • Gresham’s Law: “Bad money drives out good”

  • Cantillon Effect: Early recipients of new money benefit the most

  • Pareto Principle (80/20 Rule): 80% of effects come from 20% of causes

  • Inflation

  • Deflation

  • Wealth Distribution

  • Purchasing Power

  • Asset Allocation



🧾 Sunshine State Standards Alignment

Social Studies – Economics & Financial Literacy

  • SS.912.E.1.1 – Distinguish between private goods/services and public goods/services.

  • SS.912.E.1.11 – Explain how the Federal Reserve uses monetary tools to promote price stability, full employment, and economic growth.

  • SS.912.FL.1.1 – Describe how education, interest, and skill development affect income and career opportunities.

  • SS.912.FL.3.3 – Analyze the costs and benefits of government policies that affect markets.



📚 Materials Needed

  • Whiteboard or Smartboard

  • Printed handouts with concept definitions and real-life examples

  • Chart: “Who Wins from Inflation?” (Cantillon map)

  • Graph: “Pareto Income Distribution”

  • Video Clip (optional): Quick YouTube explainer on Gresham’s Law or Cantillon Effect

  • Student exit tickets



🔄 Lesson Flow

🕘 Warm-Up (10 minutes)

  • Ask students: “If you had two dollar bills, one crisp and new, and one torn and old— which one would you spend first? Why?”

  • Introduce Gresham’s Law through this discussion.


📖 Direct Instruction (30 minutes)

  • Gresham’s Law: Explain how undervalued currency disappears from circulation. Use historical U.S. silver coins as examples.

  • Cantillon Effect: Show how those closest to the money printer (banks, government contractors) benefit before prices rise.

  • Pareto Principle: Introduce the 80/20 rule using real examples (wealth distribution, business revenue, school performance).


🧩 Activity – Real World Connections (30 minutes)

  • Break students into 3 groups. Each group gets a case study:

    • Group 1: The U.S. abandoning the gold standard and the impact on money circulation (Gresham’s Law).

    • Group 2: COVID stimulus checks vs. Federal Reserve asset purchases (Cantillon Effect).

    • Group 3: 80/20 rule in social media influencers or Amazon sales (Pareto Principle).

  • Each group answers:

    • What’s happening?

    • Who benefits?

    • How does this principle explain it?


🧠 Reflection & Exit Ticket (15–20 minutes)



📌 Assessment

  • Informal: Group presentation/discussion

  • Formal: Exit ticket response (graded on comprehension & connection)

  • Optional extension: Have students research a recent news event and explain it using one of the principles.



 
 
 

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