Summary: In this multi-layered lesson, students consider what happens when money becomes less available or “when liquidity dries up.” Students begin with simulations that demonstrate the circular flow model and liquidity while analyzing the harm to the economy when liquidity dries up. Students then assess the impact of COVID-19 in New Jersey, New York, and Connecticut simulate the purchase of assets in the markets. Finally, students compose a briefing for the Federal Reserve Board of Governors on the economic outlook.
Overarching Questions:
- ECONOMICS: What is the proper role of government in the economy? (Especially with regard to economic crises, national defense/security, health and safety of the people, and economic development and practices.)
- NEW JERSEY: How have changes in New Jersey during this time period influenced U.S. history?
NJ Student Learning Standards for Social Studies:
- 6.1.12.EconNE.14.a: Use economic indicators to evaluate the effectiveness of state and national fiscal (i.e., government spending and taxation) and monetary (i.e., interest rates) policies.
- 6.1.12.EconET.14.a: Use current events to judge what extent the government should intervene at the local, state, and national levels on issues related to the economy.
Link to Lesson: the-flow-of-money-an-overview-and-lesson-plan-for-educators-on-monetary-policy-during-covid-19 (newyorkfed.org)