Indiana Social Studies GE.7.5

Social StudiesGrades 9–12Economic Stabilization

The Standard

Analyze how the Federal Reserve uses monetary policy to promote price stability, full employment, and economic growth.

2026 Indiana Academic Standards: K-12 Social Studies

Teacher's field guide

What Students Need to Do: Students explain how the Fed’s target interest rate influences borrowing and spending. They trace how those changes can slow price increases or support jobs and growth, while recognizing the tradeoffs.
What Mastery Looks Like: Given rising inflation or layoffs, a student predicts whether the Fed would raise or lower its target rate. They explain a likely effect on spending and a possible cost, such as slower hiring or higher inflation.
Common Misconceptions: Students may think the Fed directly sets store prices or car loan rates. They may assume lower rates always help, or that full employment means nobody is unemployed.
How to Assess It: Exit ticket: Inflation is rising while hiring remains strong. Should the Fed raise or lower its target rate? Name one likely effect on borrowing and one possible cost for jobs.

Lesson moves

Give pairs car loan cards showing $210 monthly at 3% and $265 at 9%; ask which fits a $240 monthly budget.
Ask: If the Fed raises rates to slow inflation, who might welcome the change, and who might worry about jobs?
Read cards labeled “prices climbing” or “layoffs rising”; students hold up a rate arrow and explain the likely effect on spending.
Compare a $20,000 car loan at 4% and 8% for 60 months using a loan calculator; predict how higher rates affect car sales.

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