1. Unwrap the objectives Factual: Define Inflation and Deflation
Conceptual: Explain how Fiscal Polices impact the economy
Communicative: Illustrate the consequences of inflation and deflation on the middle class

2. Agenda Unwrap objectives Lecture Fill in notes
Political cartoon analysis
3,2,1 Reflection on video

3. Essential Question
Explain how Fiscal Policies of the united states affect American citizens

4. The Federal Reserve System
Unit 4 B

5. Fiscal Policy
Part 1

6. Fiscal Policy
Changes in taxes or government spending with the hope to impact the national economy
Fiscal policy is used by the government when it feels that a correction needs to be made in the economy
Proactively, it is a change made to keep something from happening
Reactively, is a change that is made because something has already happened

7. Political Cartoon Analysis
According to the political cartoon, who are the tax cuts helping?
Is the illustrator of the cartoon in favor of tax cuts?
What evidence do you have to support this?
What symbolism do you see in the cartoon?

8. Cutting taxes One Fiscal Policy is to cut taxes
The idea is that cutting taxes will put more money in the hands of people and business.
They will then spend the money by purchasing more goods causing the companies to hire more workers.
When more people are working, pay goes up and more purchases are made and more taxes are paid
The risk is that if the people that get to keep more money are afraid to spend it, then the government will lose revenue and the tax will return higher than ever

9. Increasing government spending
Another Fiscal Policy is increasing government spending
The idea is that if the government spends more money, it will create new jobs. The new jobs will increase tax revenues (income tax collected)
Workers with these new government jobs will then go and spend their money on goods and services which will improve the economy.
The Risk – the increase in government spending will lead to higher debt which will lead to a raise in taxes which will lead to less spending.

10. Inflation/Deflation
Inflation - a general increase in prices and fall in the purchasing value of money because to much money is in circulation.
Deflation - reduction of the general level of prices in an economy by limiting the amount of money available.
In general, Inflation is more dangerous to the economy because it reduces the buying power of workers. This can lead to layoffs if companies stop making profits, which only makes things worse.
Inflation is particularly hard on people that live on fixed incomes.
Incomes that are not expected to increase. Most retired people live on fixed incomes.

11. 3,2,1 Reflection Please list on your activity sheet
3 things that you learned from the video
2 things from the video that you found interesting
1 question that you have on the topic of the video
The video can be
qvA

12. Managing the Money supply
The Federal Reserve has government authority to manage the amount of money in circulation to prevent deflation or inflation as part of the governments over all fiscal policy
Money supply refers to the amount of money in circulation at any given point.
When the Fed meets, they can set policy to manage the amount of money in circulation
When purchasing power is too low, they collect money from their branches and have it destroyed
When too little money is flowing through the economy, they order more money to be printed

13. Unwrap the objectives Factual: Describe the Federal Reserve System
Conceptual: Illustrate the Functions of the Federal Reserve System
Communicative: Justify the creation of the Federal Reserve system

14. Agenda Unwrap the objectives
You Decide (Answer a few short questions based on your own opinion)
Lecture
Fill in Notes
Vocabulary check (Cross word with vocabulary for end of year vocabulary test)

15. Essential Question
Describe the Federal Reserve System, it’s functions, and Its Role in the United States economy

16. Functions and Role of the Federal Reserve System
Part 2

17. MONEY Anything that people can agree to give value to can be money
Currency includes both paper and coin money
Currency usually only has value because people agree that it does
A ten dollar bill only costs a few cents to produce
Through history, different things have been used as money
Shells, Coins, and furs have all be used as money

18. You Decide
What problems can come from the types of money listed below?
Why would they not be safe?
Shells
Coins
Furs

19. The function of money Money has three functions:
Medium of exchange – this means we can trade money for goods or services
A store of value – this means that we can hold our wealth in the form of money until we are ready to use it
A Measure of value – the price of goods and services tells us what value they have

20. You Decide
What items can you think of that could be or should be used as money in an apocalypse?
Why?
When is it important for currency to be backed up by something?

21. Financial Institutions
Commercial Banks – are institutions that offer full banking services
Savings and loans associations (S&Ls) – Institutions that traditionally loan money for people to buy house. S&Ls also provide savings accounts
Credit Unions – They work on a not-for-profit basis, where the goal is to offer great rates for members of a select group.
These three Financial institutions all serve similar roles
They connect people that want to save money with people that want to borrow money

22. Keeping the financial system safe
Banks make up a key role in the financial system and need to be protected so that the people that use them are protected
When you deposited money into your checking account, the bank puts that money to work by loaning it out to someone until you come to get it.
If too many people come to get their money back from a bank (bank run), then the bank will not have the money to give it all back to the people that get to the bank last.
The federal reserve was created to protect the nations financial systems.

23. The Federal Reserve System
Created to prevent runs on the bank by managing the financial system
They do this through regulations and by having the ability to set a rate of interest for banks that borrow from the fed.
The fed also serves as the bank for the federal government in three ways:
It holds the governments money used to make payments and to buy goods
The fed sells government bonds so that the government can borrow money
The fed issues the nations currency
The fed does not print money or create coins this is done by other departments but they do so on the command of the fed

24. Changing the supply of money
The fed determines the amount of money that is in circulation.
When more is needed, they order more to be printed
When too much is available, they order old money to be collected and destroyed