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| Core Learning Goal: 4 |
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The students will demonstrate an understanding of the historical development and current status of economic principles, institutions, and processes needed to be effective citizens, consumers, and workers.
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| Expectation: 1 |
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The student will demonstrate an understanding of economic principles, institutions, and processes required to formulate government policy.
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| Indicator: 4.1.4 |
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The student will evaluate the effectiveness of current monetary and fiscal policy on promoting full employment, price stability, and economic performance.
Assessment Limits:
- Business cycle, monetary policy (Federal Reserve System
increasing/decreasing the money supply) and fiscal policy,
(Congress and President increasing/decreasing taxes
and/or spending) and their effect on economic performance,
full employment, and price stability.
- Measures of economic performance include Gross Domestic Product
(GCP), Consumer Price Index (CPI) and unemployment rate.
- Tools of the Federal Reserve System (FED) include the reserve
requirement, interest rates, and open-market operations (buying
and selling of government securities).
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This is an introductory lesson on monetary policies. A basic economics
textbook might provide more information than a government text. |
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Students will define vocabulary terms related to monetary policies. |
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Students will apply monetary tools to solve economic scenarios. |
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Teacher Resource: Monetary Diagram |
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Government/economics textbooks |
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Overhead Transparency: Economic Problems |
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Student Handouts:
- Monetary Policy Vocabulary
- Monetary Policy
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Group Handout: Economic Problem Solving |
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Useful Website: www.federalreserve.gov/policy.htm |
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- Ask students: “What have you done this week to help our economy?”
Direct responses toward how consumer spending helps the economy.
- Distribute the handout Monetary Policy Vocabulary and have students
use texts to define the terms. Review their answers.
- Distribute the handout Monetary Policy and lead a discussion on the
process. Help students complete the diagram if their text does not contain
sufficient information (see Teacher Resource diagram).
- Tell students that they will assume the role of economic advisors to the
President. Divide the class into groups and assign each group one
economic problem from a transparency of Economic Problems.
Distribute a copy of handout Economic Problem Solving to each group
and review the directions.
- Have each group report on their economic problem and the tools that the
group recommends to solve the problem. Instruct all students to take
notes during this problem-solving discussion.
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Have students answer this Brief Constructed Response item:
The money supply has increased by five percent over the past year.
People have money to save and money to spend. Interest rates on
personal and business loans are low. Prices, however, are increasing at
an alarming rate.
- Describe actions the Federal Reserve can take to stabilize the economy.
- Which action would be the most effective? Explain.
- Include examples and details to support your answer.
Use the Social Studies Rubric to score student responses.
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 Print Version: Government Lesson Plan (Acrobat 31k)
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