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Wisconsin Economic Standard
D.12.5

Fiscal and Monetary Policy

Explain how federal budgetary policy and the Federal Reserve System's monetary policies influence overall levels of employment, interest rates, production, and prices

Economic Concepts
Monetary policy  ||  Fiscal policy  ||  Taxes  ||  Federal Reserve System
Employment  ||  Inflation  || Interest rates  ||  Production

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Links to Content Information

blue check mark Democracy and Government Control of the Money Supply - This essay looks at the revolution of electronic money and how democracy may be influenced.
blue check mark Federal Budgets and Deficits - Links to several sites leading to better understanding of the federal budget.
blue check mark The Federal Reserve System - The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system; over the years, its role in banking and the economy has expanded.
blue check mark Tax History Project - A research project to provide scholars, policymakers, students, the media, and citizens with information about the history of American taxation.
blue check mark Money - Chapter 18 from Essential Principles of Economics: A Hypermedia Text, First Revised Draft
blue check mark Monthly Consumer Price Indexes (CPI) from the Federal Reserve Bank of St. Louis.
blue check mark Regulation in Our Economy - A good list of internet resources about how our government regulates our economy.
blue check mark U.S. House of Representatives Committee on the Budget
blue check mark United States Monetary Policy - Monetary policy is a central bank's actions to influence the availability and cost of money and credit, as a means of helping to promote national economic goals.  Requires Adobe Acrobat Reader.

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Links to Lesson Plans and other Suggested Teaching Strategies

blue arrow CCER's National Budget Simulation -  Grades 11-12.  This simulation is designed to involve students in the intricacies of the budget process, the frustrations of politics, and the "no-win" solutions. The simulation helps students understand the budget-balancing process and to interest them not only in this particular unit but in government itself.
blue arrow Controlling Interest - Discusses whether ceilings on interest rates are a good idea. Explains the economic theory behind the arguments for and against usury ceilings, examining in particular credit card interest rates. Accompanies Controlling Interest booklet, available online or in print. 
blue arrow Jesse 'The Body' Wants to Give Money Away! - Grades 9-12. Do surpluses present a unique opportunity to deal with problems of poverty, low agricultural prices, education, road construction, and other unmet needs in the state? Or should they be returned to taxpayers?
blue arrow National Budget Simulation - This simple simulation gives a feel of the trade-offs which citizens and policy makers will need to make to balance the budget. There are three ways to play the game,  offering different levels of detail.  This site also includes links to information about the Federal Budget.
blue arrow Regulation in Our Economy - A plan for preparing a group presentation about government regulation of our economy.
blue arrow The Road to Emerald City is Paved With Good Intentions - Grades 9-12. This lesson examines the historical relationship between the money supply and the price level. It points out why it is so important for a central bank to strike a balance between inflationary and deflationary concerns.
blue arrow U.S. Senate Rejects Minimum Wage Bill - Grades 9-12. Students will look at the issues involved in determining the minimum wage.
blue arrow What are the economic functions of government?  Middle and High School level.  Class discussion and small group task identifying six economics functions of government and examples of these functions using current events. From Focus on Economics: Civics and Government,    ©National Council on Economic Education.

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List of Curricular Materials and Learning Activities

blue push pin Focus on Economics: Civics and Government, from Economics America (search catalogue), available from Economics Wisconsinn. Relevant lessons: 
  • Lesson 6, Unit 3: How Can Changes in the Federal Government's Budget Stabilize the Economy? - An examination of the Business Cycle of unstable swings in a market economy and how fiscal policy changes in the spending and taxing levels of government impact the economy.  pp. 37-42
  • Lesson 11, Unit 3: What Can the Government Do About Unemployment? - An understanding of the three types of unemployment and the various policies government can pursue to alleviate unemployment is developed.  pp. 61-65
blue push pin Focus: High School Economics, from Economics America (search catalogue), available from Economics Wisconsin. Relevant lessons: 
  • Lesson 18: Economic Ups and Downs - Students use economic data to learn about business cycles; to determine the relationships between  GDP, inflation, and unemployment; and to understand how expansions and contractions in the economy can affect their own career goals. pp.165-171
  • Lesson 19: Aggregate Supply and Demand: The Sum of Their Parts, and More - Students compete to identify various components and effects of aggregate supply and demand. pp.172-186
  • Lesson 20: Money, Interest, and Monetary Policy -  Three simulations help students discover the effects of changes in the supply of money in the economy and how the Federal Reserve uses tools of monetary policy to adjust that amount of money. pp. 187-197
blue push pin The Story of Monetary Policy - Explains in non-technical language -- the meaning and purpose of monetary policy; how the Federal Reserve makes monetary policy; what factors the Fed considers in making monetary policy; the tools of monetary policy--open market operations, reserve requirements, and the discount rate--and how they work. 1996. 24pp. Available from Federal Reserve System. To find it, type "story of monetary" (without the quote marks) in the keyword search box and click on Go.
blue push pin Economies in Transition: Command to Market, from Economics America (search catalogue), available from Economics Wisconsin.  Relevant lessons: 
  • 5:  Public to Private - Students write the rules of a simple game, then consider the more complicated rules and regulations appropriate for a market economy and the difficulties that economies in transition face.  Students also examine legislation designed to move some agricultural markets away from federal price supports to a more market-based approach.  p. 59
  • 6:  All For One, One For All--Well Maybe: Problems Within a Tightly Controlled Industrial Structure - Students discuss the consequences of monopolistic markets.  They experience the effects of price controls and identify how shortages are eliminated in a market economy.  p. 67
blue push pin Virtual Economics: An Interactive Center for Economic Education, Version 2 - Each exhibit includes teaching tips, background information, a list of lessons, and video and audio clips that give additional information about the topic.  Available from Economics America (search catalogue). 
  • In section MacroEconomics, see exhibits: 
    • Inflation
    • Monetary Policy
    • Fiscal Policy
  • In section MicroEconomics, see exhibit:  Roles of Government
blue push pin The Fed: Our Central Bank (booklet available online or in print)- Provides a quick and easy-to-read review of the structure and functions of the Federal Reserve System.

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National Content Standard 20.

    Scroll down the linked page to locate the grade 12 benchmarks.

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Email an expert

    Professor Jim Grunloh, University of Wisconsin-Oshkosh

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Developed by 
Lynn Kirby, Ph.D.
Larry Weiser, Ph.D.