Federal+Reserve+-+Monetary+Policy

toc **Lesson Essential Question**
 * The Federal Reserve - [Monetary Policy] **
 * How do the tools of monetary policy // [i.e. Open Market Operations, Discount Rate, Reserve Requirements] // during a time of recession?

Launch Activity
** Task 1 **  - You will be reading an article about the most recent recession, or economic downturn, and how the Federal Reserve and other agencies are attempting to address the problem. Remember, the Federal Reserve, or Fed, is the institution in our country that promotes economic growth and stability by controlling the amount of money and credit in the economy.

 **__Article__**: ** [|Monetary Policy Affect Students and Their Families] **


 * Task 2 ** - Respond to this writing prompt on the following Google Form:

[|Google Doc - Federal Reserve]

Lesson Procedures
** Task 3 ** - Preview the following video on Monetary Policy. media type="youtube" key="HdZnOQp4SmU" height="214" width="268"

** Task 4 ** - You are now ready to begin the very important process of researching the tools used by the Federal Reserve to conduct monetary policy. This step of the process will not only challenge your understanding of monetary policy but also utilize your ability to conduct specific research using the Internet as a tool.

You will be divided into groups of 3 to 4 students. Each group will be assigned a Google Doc to record information and notes about the research you are completing. This task will be completed as a group with each member contributing to the final product.

__**Group Google Docs**__:

[|Group 1 - Google Doc] [Additional Groups to be Created in the Future]

Resources: [] [] [] [|http://www.learningmarkets.com/Stocks-Investing-Basics/20081016511/the-monetary-policy-tools-of-the-federal-reserve.html] []

** Task 5 ** - Download and save the following Word document to the computer's desktop. This will be the document you will use to record your own personal understanding from task 4. Your task is to populate the ** "Impact on the Money Supply" ** and ** "Effect on the Economy" ** fields on the worksheet using information you locate on the Internet. I have included a few suggested links below to serve as a catalyst for your in-depth study of the Federal Reserve and its ability to conduct monetary policy.



** Task 6 ** - Complete the following quiz before moving on to the project:

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Project Description
So you think you have a solid understanding of monetary policy? The following projects are designed to challenge your understanding of the FED's monetary tools. You will be delegated the responsibility of assessing the current economic conditions in a fictitious country and offering suggestions to improve the economic conditions. **__Prior to beginning work on your selected project you will need to organize yourselves into groups of three students__**. This is a group effort and the participation by each member is crucial to the overall success of the group. It is strongly recommended that you peruse the scoring rubric for your project to make absolute certain you are satisfying the criteria upon which your project will be scored. If you have any questions, please do not hesitate to ask the teacher.

** Current Economic Conditions in Selected Countries: **

** __The Country of Carpathia__: ** The country of Carpathia is currently experiencing one of the worst economic recessions in their history. The economic hardships are affecting both the workers and the businesses. One out of every three Carpathians are unemployed. The output of goods and services has fallen over the past year. Factories are closing every day and workers are being laid off with each passing day. The citizens are hoping the central bank, known as ESC - Economic Stability Committee, can turn the economy around using the available monetary tools [discount rate, open market operations, and reserve requirements].

** __The Country of Malbonia__: ** The country of Malbonia is experiencing a period of high unemployment at a rate of 15%. Factory production is at the lowest level in years and people are spending very little money on consumer goods and services. Personal debt and business debt is extremely high due to the tremendous borrowing over the past decade. The citizens of Malbonia are hopeful that the Nation's central bank, known as CER, Committee for Economic Recovery, can use their monetary tools to get the economy back on track.

__** The Country of Tijata **__: The economy of Tijata is stagnant (inactive). Consumer and business spending has been declining in the past year. Unemployment is not a major concern at 2.5%. There is a huge government deficit which concerns the citizens and lawmakers of Tijata. The citizens of Tijata are requesting the ERC, Economic Recovery Committee, to use their monetary tools to bring life back to the economy.

**__Project Instructions__**: After the teacher has checked your monetary policy worksheet and you have completed the online quiz your group may begin work on the project. Your group must select one of the fictitious countries above and complete one of the following projects:


 * Option 1**: You will assume the role of the "economic committee" in your country to create a **__three__** **__minute radio broadcast__** that will aired on public radio to address the current status of the economy. Your radio address should explain in detail the current economic conditions that exist in your country, an explanation of why the conditions are a problem, what monetary policy the committee is planning to use to address the situation, an explanation of what specific actions will occur with the selected monetary tool, and what intended effect will the monetary action have on the economy?


 * Option 2**: You will assume the role of the "economic committee" in your country to create a __**o****ne page newspaper layout**__ that will published in the local newspaper to address the current status of the economy. Your newspaper article should address should explain in detail the current economic conditions that exist in your country, an explanation of why the conditions are a problem, what monetary policy the committee is planning to use to address the situation, an explanation of what specific actions will occur with the selected monetary tool, and what intended effect will the monetary action have on the economy?


 * Option 3**: You will assume the role of the "economic committee" in your country to create a __**three** **minute news broadcast**__ that will be aired on the local nightly news to address the current status of the economy. Your news address should explain in detail the current economic conditions that exist in your country, an explanation of why the conditions are a problem, what monetary policy the committee is planning to use to address the situation, an explanation of what specific actions will occur with the selected monetary tool, and what intended effect will the monetary action have on the economy?

Project Scoring Rubrics

 * __Scoring Rubric for Option 1__**:


 * __Scoring Rubric for Option 2__**:


 * __Scoring Rubric for Option 3__**:

Academic Standards

 * PA Economics Standard(s):**
 * 6.3.12.B. - Assess the government's role in regulating and stabilizing the state and national economy.
 * 6.5.12.H. - Evaluate benefits and costs of changes in interest rates for individuals and society.


 * ISTE Standards:**
 * 1 [A, B, D]
 * 2 [A, B, D]
 * 3 [B]
 * 4 [A]
 * 5 [A, B]
 * 6 [A, B, D]