The Federal Reserve and Monetary Policy
Webquest adapted from http://zunal.com/webquest.php?w=75438 and revised by Ms. White 11/2011.
In this webquest you will explore the role of the Federal reserve in controlling the money supply and how actions of the Fed impact the nation’s economy.
The Federal Reserve System is also known as The Fed. Many people don’t realize the importance and power of the Federal Reserve. It was created to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Fed plays an integral role in the United States’ government and economy. Your group’s mission is to determine our (the Fed’s) role in the government, money supply, economic growth, and central banking.
Task #1 - Federal Reserve Video
1. Watch the video found at this link: The Federal Reserve In Plain English
2. As you watch complete the questions on this worksheet (you will print this to turn in when complete).
Task #2 - The Banking System
Use the CNN Money 101 website to complete Banking Scavenger Hunt (You will print this to turn in when complete)
Task #3 – Chairman of the Federal Reserve
The Chairman of the Fed is the head of the central banking system of the United States and one of the most important decision-makers in American economic policies. Use the links provided to answer the questions below about the Chairman of the Fed:
- How does the Chairman become appointed?
- What is his term of office?
- What are his responsibilities?
- Who is Alan Greenspan? Why is he important?
- How important is the position of Chairman of the Federal Reserve?
Links for information:
Task #4 – Federal Open Markets Committee (FOMC)
The FOMC is charged with overseeing open market operations in the United States, and is the principal tool of US national monetary policy. Use the links provided to find the information below:
- Who sits on the FOMC?
- What is the importance of the FOMC?
- How do they influence the monetary policy?
- What are the three tools for controlling the money supply?
- Which tool is used the most?
- What is the goal of the FOMC?
- How does the FOMC impact the economy?
Task #3 – Follow Up
Use the information you have gathered along with your textbook for this portion of the assignment. Create a 4 x 4 chart. Label the columns “Tools of Monetary Policy,” “Definition,” “Action #1″ and “Action #2.”
Complete the chart. In the Action columns explain how the Fed can manipulate the tool of monetary policy (increase, decrease) and explain the intended effects on the economy.
Task #4 – Application
Use the internet to locate an article describing the Fed’s use of monetary policy to manipulate the economy. Read the article and complete the following questions:
- Write a one paragraph summary of the article
- What tool of moetary policy is being used by the Fed in this article?
- What is the Fed hoping will happen as a result? Describe in some detail using your knowledge of economics.