Materials

  • CCB Mathematics pages 224 - 229

Standards

Objectives

  • Define fiscal policy

  • Define monetary policy

  • Explain how fiscal and monetary policies help manage the economy

Key Concept

  • The federal government uses fiscal policies and monetary policies to manage the economy.

Vocabulary

Tier 2 Circulation
Expenditures
interest rate
revenue
Tier 3 fiscal policy
monetary policy
national debt
Test Words inflation

Evidence-Based Reading

  • Analogies: Write these analogies on the board: revenue : income as expenditures : expenses Point out the relationship in each analogy. Invite students to suggest additional analogies for revenue and expenditures. (Sample answers: analogies for revenue: earnings, proceeds, yield, profit; analogies for expenditures: outgo, outlay, disbursement)

Workplace Connection

  • Understand Your Paycheck: After students have completed the exercise, ask whether any of them have questions regarding deductions on their pay stubs. Tell students to go online for further information on the different deductions and how those funds, such as Social Security or Medicare deductions are used. Point out that workers of all ages pay into Social Security and Medicare and that these deductions are actually an investment in their future. (They will receive Social Security payments and Medicare coverage after they reach a certain age or if they become disabled.)

Writing Practice

  • Before students write their paragraphs, check their understanding of interest in this context. Tell them that the interest referred to is money they pay for car and house loans, not interest they earn. Higher interest rates means they will have to make higher loan payments.

Before Lesson

In Lesson 5.3, students learned about the government’s expanding role in the economy under President Roosevelt’s New Deal. They also learned basic information about the government’s role in stabilizing the economy through use of fiscal policy and monetary policy. Ask what students recall about how fiscal policy is used to control the economy. (Sample answer: by increasing taxes to pay for programs) Then ask how monetary policy is used to regulate the economy. (Sample answer: by adding or removing cash from the economy) Write student responses on the board. Tell students that they will learn more about fiscal policy and monetary policy in this lesson.

Background

Tell students that the federal government’s taxing and spending policies form its fiscal policy, and through its monetary policy, the federal government controls the monetary supply and interest rates. Point out to students how both of these policies directly affect their lives: most of the funds the federal government uses come from income and payroll taxes, and federal control of the interest rate affects how much people must pay for loans.

Guided Practice

  • Federal Revenue and Expenditures
  • Fiscal Policies
  • Monetary Policy
  • The Federal Reserve System

Core Skill

Interpret Graphics: Ensure students understand that circle graphs show 100 percent of whatever the graphs are displaying and that the two circle graphs on page 225 show 100 percent of federal income and 100 percent of federal spending. Pair students, then direct them to formulate and ask each other three to five questions about the graphs. Once you ensure everyone can read the graphs accurately, explain that students can break down their own income and expenses using circle graphs. Ask students to create a circle graph showing their income or expenditures. Invite students to share their graphs with their partners.

Conduct Research Projects: Guide students in using search engines to locate information about the American Recovery and Reinvestment Act. They should identify it as a fiscal policy designed to stimulate the economy. It is popularly known as the Obama Stimulus, after President Barack Obama, who advocated the policy. Tell students to use these key words American Recovery and Reinvestment Act 2009 in their searches. Remind them that the most credible websites are those ending in .gov, .edu, and .org.

Extension

Practice Difficult Words: Have students practice reading difficult words from the boxed text on page 227. Have them mark syllable breaks. Read one sentence at a time and have students repeat, checking for accuracy as they do so.

Draw Conclusions about Tax: Increases Have small groups of students work together to investigate the effects that federal tobacco tax increases, such as the federal cigarette tax increase in 2009, have had on the sale of cigarettes over the years. Ask groups to consult several online sources and draw conclusions from them to present to the class.

Lesson Review