Standards for Money, Monetary Policy, and the Federal Reserve Video Series and Quiz

Standard: 17

Name: Monetary Policy

Monetary policy refers to interest rate and money supply decisions made by a central bank. In the United States, the Federal Reserve uses monetary policy to promote maximum employment and a low, stable rate of inflation.

• 6-8: Middle school students learn that the Federal Reserve is the central bank of the United States and are introduced to the goals of the Federal Reserve.
• 9-12: High school students learn about the composition of the Federal Reserve. They then learn about how monetary policy is implemented and how a change in the federal funds rate can impact the economy.Benchmark Students will know that: Students will use this knowledge to: 17.M.1 The Federal Reserve is the central bank of the United States. A country’s central bank oversees and regulates the banking system and sets monetary policy to promote a healthy economy.Explain how a central bank provides benefits for citizens, the banking system, and the economy overall. 17.M.2 Monetary policy is the actions taken by a central bank that influence interest rates and overall financial conditions in an economy.Discuss how changes in interest rates affect a business’s or individual’s decision whether to save or invest. 17.M.3 The Federal Reserve has a dual mandate from the U.S. Congress to promote maximum employment and price stability in the U.S. economy.Explain why both maximum employment and price stability are important to consumers, producers, and the economy overall.