Oklahoma Social Studies E.C.10.5
The Standard
- E.C.10
- Identify the potential economic impact of government policy.
Analyze how the Federal Reserve uses monetary policy tools (e.g., changes in the discount rate, reserve requirements, money supply) to influence economic conditions.
Oklahoma Academic Standards for Social Studies (2026) · E.C.10
Teacher's field guide
What This Standard Means
What Students Need to Do
- Students explain how the Fed uses interest rates, bank reserves, and the money supply to influence the economy. They predict how a policy change might affect lending, spending, inflation, and jobs.
What Mastery Looks Like
- Given rising inflation, a student can explain why raising the discount rate or selling bonds may slow borrowing and spending. They can explain how the reverse actions may help a weak economy, while noting that results take time.
Common Misconceptions
- Students may think the discount rate is the rate households pay, rather than a rate banks pay to borrow from the Fed. They may think banks currently have to keep a fixed share of deposits in reserve, or that more money causes immediate inflation.
How to Assess It
- Exit ticket: The Fed raises its discount rate and sells bonds during high inflation. Explain how each action could affect borrowing and spending.
Lesson moves
Ways to Teach It
Give groups $100 in paper deposits; have them set aside 10%, then 20%, as hypothetical reserves and compare what remains for loans.
Ask: “Prices are rising quickly. Should the Fed raise the discount rate or buy bonds? Explain your choice.”
Play a card sort matching “sell bonds,” “cut discount rate,” and “raise reserve requirement” with their likely effects on lending.
Read the Fed’s June 2022 rate announcement, highlight its inflation goal, and predict how higher rates could affect car loans.
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Related Standards
- USH.C.4.2.D
Examine the role of monetary policy and the expansion of credit in the 1920’s including the creation and actions of the Federal Reserve System and their relatio...
- USG.C.7.1.D
Examine how the government can influence the stability and growth of the economy through fiscal and monetary policy.
- E.C.6
Evaluate how interest rates impact decisions in the market economy.
- E.C.10.1
Compare fiscal and monetary policy and evaluate the impact each has on economic growth, employment, and price stability.
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