FOCUS QUESTIONS FOR THIS SECTION
How does money as a medium of exchange improve ease of trade?
What role does the Federal Reserve play in managing the value of money to ensure the continued operation of the economy?
Section 2: Currency and the Federal Reserve
SECTION DESCRIPTION
In these lessons, students will understand why currency is the best method to pay for goods and services over the currency of years past, explain what the U.S. Federal Reserve does for individuals and banks, perform the role of the Federal Reserve, and make decisions that could affect inflation.
LESSON OBJECTIVES
Define bartering and money.
Explain why money makes trading much easier than bartering.
LESSON OBJECTIVE
Distinguish characteristics of U.S. currency.
Paraphrase the role of the Federal Reserve as the central bank of the United States.
Explain the effects of the Federal Reserve’s power to raise/lower interest rates and increase/decrease
the money supply.
LESSON OBJECTIVES
Role-play the check-clearing process of the Federal Reserve.
Demonstrate the writing of checks from one bank, depositing of checks into a second bank, and the Federal Reserve’s actual clearing of the check, after which the money is moved from the check writer’s bank to the depositor’s bank.
LESSON OBJECTIVES
Examine the effects of the Federal Reserve’s monetary policy on inflation.
Compare the price differences that result from increasing and decreasing the money supply.
LESSON OBJECTIVES
Plan a monetary policy that will help manage rising inflation.
Write and give a speech explaining the course of action for solving the problem of increasing inflation and the expected results.