What is the primary goal of the Federal Reserve concerning unemployment and inflation?

The Fed's primary goal is to keep both unemployment and inflation in check.

What is the federal funds rate, and why is it important?

The federal funds rate is the interest rate banks charge each other for the overnight lending of reserves. It is important because the Fed uses it to influence other short-term interest rates.

Explain how the Federal Reserve influences short-term interest rates.

The Federal Reserve influences short-term interest rates by adjusting the federal funds rate through open market operations, which affects the cost for banks to borrow money.

Describe what open market operations are and how they are used by the Federal Reserve.

Open market operations involve the Fed buying and selling government securities to influence the supply and demand of these securities, thereby changing the federal funds rate.

What is quantitative easing (QE), and why did the Federal Reserve start using it?

Quantitative easing is when the Fed purchases longer-term securities to influence long-term interest rates. The Fed started using it as a result of the Great Recession to further stimulate the economy.

Federal Reserve Powers

10th GradeSocial Studies45 min

aligned to Ccss Ss.9-12.econ.16

Learning Objective

I can describe the key powers of the Federal Reserve.

Lesson Flow

Watch Video

5 min

What Does the Federal Reserve Do?

Charles Schwab

Guided Notes

9 min

Key concepts students will learn:

•
The Federal Reserve (the Fed) influences the U.S. economy by controlling the money supply and influencing interest rates.
•
The Fed uses open market operations, such as buying and selling government securities, to influence the federal funds rate.
•
The Fed aims to keep unemployment and inflation in check; lowering rates can stimulate the economy, while raising rates can reduce inflation.

Practice

14 min

10 questions • Multiple choice & Short answer

Exit Ticket

5 min

“Describe two key powers of the Federal Reserve and explain how these powers can influence the U.S. economy.”

Teacher Guide

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Federal Reserve Powers

Learning Objective

Lesson Flow

Watch Video

Guided Notes

Practice

Exit Ticket

Teacher Guide

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