Indiana Social Studies GE.7.1

Social StudiesGrades 9–12Economic Stabilization

The Standard

Define and explain fiscal policy and its tools.

2026 Indiana Academic Standards: K-12 Social Studies

Teacher's field guide

What Students Need to Do: Students explain how federal taxes and spending can affect the economy. They describe why the government might use these tools differently during a recession and a period of high inflation.
What Mastery Looks Like: A student can explain how a tax cut or more federal spending might help when sales and hiring are weak. They can explain why higher taxes or less spending might slow demand when prices are rising quickly.
Common Misconceptions: Students often call interest rate changes fiscal policy, but those are a monetary policy tool. Some think more government spending is the right response to both a recession and high inflation.
How to Assess It: Give this exit ticket: “A recession hits. Congress funds road repairs and lowers income taxes. Name both fiscal tools and explain how one could affect jobs or spending.”

Lesson moves

Give pairs 20 counters split between households and a federal treasury; have them move counters to model a tax cut and a road project.
Ask: “Stores report weak sales. Would you cut taxes or increase federal spending? How could your choice affect jobs?”
Read “Congress lowers taxes,” “Congress funds repairs,” and “the Fed raises interest rates”; students hold up fiscal or monetary cards.
Show a news report about a federally funded road repair; ask students to identify the fiscal tool and one possible effect on local jobs.

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