Oklahoma Social Studies E.C.4.4
The Standard
- E.C.4
- Describe the role of economic institutions and government in a market economy.
Explain how commercial banks expand and contract the money supply through lending, repayment of loans, and reserve requirements, and describe how central banking policies influence these processes.
Oklahoma Academic Standards for Social Studies (2026) · E.C.4
Teacher's field guide
What This Standard Means
What Students Need to Do
- Students track how a bank loan adds money to an account and how repayment removes it. They use a bank ledger to check reserve requirements. They explain how central bank interest rates and reserve rules can affect lending.
What Mastery Looks Like
- Given a $50 loan, a student records a $50 new deposit and removes $50 when the principal is repaid. They can explain why a higher reserve requirement may limit lending and why a higher policy rate may reduce demand for loans.
Common Misconceptions
- Students may think a loan only transfers existing cash, rather than creating a deposit. They may think repayment just moves money into the bank, rather than removing deposit money. They may assume a higher policy rate stops all lending immediately.
How to Assess It
- Exit ticket: A bank credits a borrower's account with a $40 loan, then the borrower repays $40 from that account. State the change in deposits at each step, and explain how a higher reserve requirement could affect future loans.
Lesson moves
Ways to Teach It
Have pairs use a bank ledger with $100 in reserves and a 10% reserve rule to record a $50 loan, its deposit, and repayment.
Ask students: If the central bank raises its policy rate, why might fewer people apply for car loans?
Give groups loan and repayment cards; have them update a running deposit total and check each change against a bank ledger.
Give students two mortgage offers, one at 4% and one at 7%, and have them predict how each rate affects borrowing.
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