Nela Richardson provides a brief description of the Federal Reserve and how it functions. She discusses the responsibilities and tools of the Federal Reserve.
This lesson will introduce the need for the Federal Reserve Bank and its structure. It also includes information on the goals of the Federal Reserve and the tools it uses to accomplish these goals. This lesson includes two clips relating to the general mission and actions of the Federal Reserve. Students use this information to participate in an online simulation of the Federal Reserve.
As a class, discuss the following questions:
Have the students view the two clips below and answer the questions on the following handout:
Handout: Goals and Tools of the Federal Reserve (Google Doc)
Video Clip 1: Introduction to the Federal Reserve (2:39)
Why was the Federal Reserve created?
How is the Federal Reserved structured?
What are the two main responsibilities of the Federal Reserve?
Video Clip 2: Federal Reserve Policies and Consumers (4:48)
How can the Federal Reserve use interest rates to stimulate the economy?
How can the Federal Reserve purchase assets/use quantitative easing to help grow the economy?
How can the actions of the Federal Reserve impact you as a consumer?
After viewing the clips, go over the answers with the students.
Explain how the Federal Reserve can control the Federal Funds Rate which is the interest rate that banks use to in transactions with each other.
Using individual computers or personal devices, have the student go to the Chair the Federal Reserve simulation (Website). Students will simulate the actions of the Federal Reserve by adjusting the Federal Funds Rate to try to fulfill the two responsibilities of the Federal Reserve.
Have the students answer the following questions about their experiences with the simulation: