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Fiscal & Monetary Policy Activities for High School

Instructor: Tammy Galloway

Tammy teaches business courses at the post-secondary and secondary level and has a master's of business administration in finance.

Students may think that fiscal and monetary policy sounds difficult to understand. However, the following activities will help you introduce students to each economic policy and makes learning fun and competitive.

Fiscal & Monetary Policy Activities for High School

Students have heard the terms 'taxes,' 'interest rates,' and 'banks.' However, do they know how the terms are all related and which federal policies are responsible for each?

Fiscal policy outlines the government's approach to spending, borrowing, and taxation, while monetary policy focuses on the money supply, interest rates, and credit availability. The following activities introduces students to both policies and explores their impact on citizens.

Can Banks Run Out of Money?

Explain that banks must maintain a certain level of cash on hand for withdrawals and loans to ensure they do not run out of money. This requirement is called the reserve ratio. The reserve ratio fluctuates depending on several factors.

Ask students to discuss if the reserve ratio is higher or lower during the holiday seasons. Allow students to share their response then explain that the correct answer is higher since consumers make significant withdrawals and loans during this time. Now, explain that this activity simulates the reserve ratio.

Materials

  • Index cards
  • Pens/pencils
  • Container
  • Calculators or smart devices with calculator function

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