Unit 2: The Stock Market

Lesson 8: The Federal Reserve

Lesson Objective

SWBAT describe how the dual mandates of Federal Reserve ensures economic stability.

WOTD/Initial Activity

Inflation

A decrease in the value of a dollar

Deflation

An increase in the value of a dollar

Initial Activity

Why does a movie ticket today cost $12 when in 1965 it would cost 25 cents?

Activity 1: Defining the Role of the Federal Reserve

Focus Question: How did the Federal Reserve develop as a support for economic stability?

Read Defining the Role of the Federal Reserve

Analyze the dual mandates of the Federal Reserve

Answer the two close reading questions at the end of the reading

Share Out & Chart Definitions on Board

The Fed

Quickwrite

“By raising and lowering interest rates, creating money and using a few other tricks, the Fed can either stimulate or slow down the economy”

Why would the Fed want to slow down the economy?

Activity 2: Federal Reserve Economic Indicators Jigsaw

Focus Question: How do investors use the economic indicators published by the Federal Reserve to choose which stocks to invest in?

Read CPI Indicator

Read Money Supply Indicator

Read Federal Open Market Committee & the Discount Rate

Summarize your article

Describe how you could utilize this information in your investment strategy.

Share Out & Chart Definitions on Board

Summary

Discussion

How does the Fed’s manipulation of interest rates effect the economy?