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You Can Bank On It!

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Students will thoroughly understand the purpose and functions of the Federal Reserve System and its effect on our nation’s economy. They will learn that monetary policies are decisions by the Federal Reserve System that lead to changes in the supply of money and the availability of credit. Changes in the money supply can influence overall levels of spending, employment, and prices by inducing changes in interest rates charged for credit and by affecting the levels of personal and business investment spending.

Coin Type(s)

  • Quarter

Coin Program(s)

  • 50 State Quarters


  • Students will thoroughly understand the purpose and functions of the Federal Reserve System and its effect on our nation’s economy.
  • They will learn that monetary policies are decisions by the Federal Reserve System that lead to changes in the supply of money and the availability of credit.
  • Changes in the money supply can influence overall levels of spending, employment,and prices by inducing changes in interest rates charged for credit and by affecting the levels of personal and business investment spending.

Major Subject Area Connections

  • Economics


  • Ninth grade
  • Tenth grade
  • Eleventh grade
  • Twelfth grade

Class Time

Sessions: Five
Session Length: 45-60 minutes
Total Length: 151-500 minutes


  • Whole group
  • Small groups
  • Individual work

Terms and Concepts

  • The United States Department of the Treasury
  • The United States Mint
  • The Bureau of Engraving and Printing
  • 50 State Quarters® Program
  • Federal Reserve Notes
  • Circulating currency
  • Minting vs. printing of money
  • Seigniorage (SAYN–yo-rij)
  • Federal Reserve System (“the Fed”)
  • Interest rates
  • Reserves
  • Flow of money and credit
  • Treasury securities
  • Inflation
  • Banking system
  • Gross Domestic Product (GDP)
  • Discount rates
  • Business cycle
  • Unemployment


  • 1 quarter from the 50 State Quarters Program
  • 1 overhead transparency of the “50 State Quarters® Program Overview” sheet on page 59(optional)
  • 1 one dollar bill
  •  A reserved computer lab with Internet access (preferable) or texts that simply explain the Federal Reserve System and the United States Mint (optional).
  • Order any of the following publications for free from the New York Federal Reserve Bank at Click on “Federal Reserve System” to view the following titles:
    • The Story of the Federal Reserve System
    • The Story of Money
    • The Fed in Brief
    • The Federal Reserve Today
    • The Fed Today
    • You and the Fed
    • Federal Reserve Structure and Functions
    • In Plain English: Making Sense of the Federal Reserve
    •  Introducing the FED
  • Copies of the “Money in the Bank” Web questionnaire (1 per student)
  • Completed copies of the “Money in the Bank” Web questionnaire
  •  Newsprint (one sheet per group)
  • Markers (one package per group)
  • Completed Federal Reserve System graphic organizers
  • Numbered slips of paper (equal to the number of groups from the previous session)
  • A hat


Worksheets and Files

Lesson plan, worksheet(s), and rubric (if any) at

Sessions 1 and 2

  1. Begin the class with a discussion of recent changes to our nation’s currency. Display a coin minted as part of the 50 State Quarters Program and ask students what they know about these quarters. Refer to the "50 State Quarters® Program Overview" sheet if necessary.
  2. Display a dollar bill and ask students if they have seen any changes to our printed money lately, and why those changes may have taken place. Students should mention the recent changes to the twenty dollar bill for security against counterfeiting.
  3. Holding up both the quarter and the dollar bill, ask the students which piece of currency they believe is more expensive to produce. Follow this question by asking which of the two will be in circulation longer. Students may discuss these topics, but the answers may not be definitive until later in the class period.
  4. Discuss the organizations responsible for the production of our nation’s money (The United States Mint and the Bureau of Engraving and Printing—both under the Department of the Treasury). Ask the students how new money gets into circulation. Briefly explain that an organization called the Federal Reserve Board determines the actual amount of money that is placed into circulation.
  5. As a class, visit the computer lab.
  6. Distribute a "Money in the Bank" Web questionnaire to each student. Allow students to independently read the questionnaire.
  7. Explain that the students will research appropriate responses using the resources available online from the United States Department of the Treasury, the United States Mint, the Bureau of Engraving and Printing, and the Federal Reserve Bank. Also, explain that the students will only have two class periods to work on this Web questionnaire, and if they are not able to complete this work, they will be required to do so for homework.

Session 3

  1. Direct students to take out their “Money in the Bank” Web questionnaires worked on during the previous two sessions. Each student should have his or her own paper.
  2. As a class, review the information learned during the previous session by discussing the basic roles that the United States Mint, the Bureau of Engraving and Printing, and the Federal Reserve System play in our country’s economic system. Make sure the students can properly define the terms introduced in the Web questionnaire.
  3. Place students into small groups and provide each group with one sheet of newsprint and one package of markers. Direct the groups to use the information they learned through their Internet investigation to pictorially describe how the Federal Reserve System works.
  4.  As the groups complete their graphic organizers, direct them to locate another group with whom they can compare their work. The students should discuss any discrepancies between their illustrations (and understandings) of this process.
  5. Direct one group to present its graphic organizer to the class. Make any corrections necessary so that the entire class has an accurate understanding of the process.
  6. Direct the students to clearly explain the Federal Reserve System to someone else (not in their class) before the next day’s session.

Sessions 4 and 5

  1. Review the information explored during the previous session by asking students to explain the purpose and functions of the Federal Reserve System, the locations of the Federal Reserve Banks, and the purpose of the Federal Reserve Board.
  2. Have students describe their experiences in explaining the Federal Reserve System to a friend or family member. Was this difficult or easy to do? Did the students have any difficulty in conveying this information?
  3. Explain that the students will be creating a living model based on the graphic organizers they developed during the previous session. This will allow them to demonstrate their understanding of the role that the Federal Reserve System plays in our nation’s economy.
  4. Distribute a “Living Model Rubric” to each student and review the requirements as a class.
  5. Place the numbered slips of paper into a hat and allow a member from each group to select a number. This will determine the order for the presentations.
  6. Each group should take turns organizing the students in the classroom to reflect the operations of the Federal Reserve System. Once the class is organized, the students will explain the roles of each group and how they affect each other.
  7. The students who are not presenting should ask questions and share comments regarding the accuracy of the models.
  8. Complete a “Living Model Rubric” for each group.


  • Direct your students to research why the federal government can’t simply print and mint more money in order to deal with the debt without deflating the value of our country’s money. Have students explore how this relates to the FOMC.
  • Direct your students to research the Japanese economic problems especially as they relate to failed or underperforming banks. Have the students answer the following questions:
    • How is Japan’s bank crisis contributing to the recession within the country?
    • Does the country have a Federal Reserve System?
    • If they do, how is it different from ours?
    • If they don’t, how might instituting such an organization help Japan’s economy?
  • Direct your students to research the current interest rate that the Federal Open Market Committee has set. When did the FOMC set this rate? How many times has the interest rate been raised or lowered in the past two years? What affect has these adjustments had on the economy?
  • Direct your students to research the current interest rates that are available for various investment accounts over the past twelve months. Have students answer the following questions:
    • How much would you earn from a savings account? A Certificate of Deposit? A Treasury security?
    • How much interest would be charged currently for the loan on a house? A car?
    • Why are there differences between the rates the banks are giving for savings accounts and those charged on loans? Who gets the difference in money?
  • Invite a financial planner or a banker to come into the classroom and explain the reserves kept by banks and the options an investor has within the current economy for saving and investing his or her money.
  • Direct your students to research the current numbers regarding the GDP, inflation rate, and unemployment rate. Why would the FOMC be interested in these numbers when discussing its next adjustment of interest rates?

Use the worksheets, rubric, and class participation to assess whether the students have met the lesson objectives.

This lesson plan is not associated with any Common Core Standards.

Discipline: Social Studies
Domain: All Disciplinary Standards
Cluster: Economics
Grade(s): Grades K–12

Teachers should:

  • Productive resources are limited. Therefore, people cannot have all the goods and services that they want; as a result, they must choose some things and give up others.
  • Effective decision making requires comparing the additional costs of alternatives with the additional benefits. Most choices involve doing a little more or a little less of something; few choices are all or nothing decisions.
  • Different methods can be used to allocate goods and services. People, acting individually or collectively through government, must choose which methods to use to allocate different kinds of goods and services.
  • People respond predictably to positive and negative incentives.
  • Voluntary exchange occurs only when all parties expect to gain. This is true for trade among individuals or organizations within a nation, or among individuals or organizations in different nations.
  • When individuals, regions, and nations specialize in what they can produce at the lowest cost and then trade with others, both production and consumption increase.
  • Markets exist when buyers and sellers interact. This interaction determines market prices and thereby allocates scarce goods and services.
  • Prices send signals and provide incentives to buyers and sellers. When supply and demand change, market prices adjust, affecting incentives.
  • Competition among sellers lowers costs and prices, encouraging producers to produce more of what consumers are willing and able to buy. Competition among buyers increases prices and allocates goods and services to those people who are willing and able to pay the most for them.
  • Institutions evolve in market economies to help individuals and groups accomplish their goals. Banks, labor unions, corporations, legal systems, and non-profit organizations are examples of important institutions.
  • Money makes it easier to trade, borrow, save, invest, and compare the value of goods and services.
  • Interest rates, adjusted for inflation, rise and fall to balance the amount saved with the amount borrowed, thus affecting the allocation of scarce resources between present and future users.
  • Income for most people is determined by the market value of the productive resources they sell. What workers earn depends, primarily, on the market value of what they produce and how productive they are.
  •  Entrepreneurs are people who take the risks of organizing productive resources to make goods and services.
  • Profit is an important incentive that leads entrepreneurs to accept the risks of business failure
  •  Investment in factories, machinery, new technology, and in the health, education, and training of people can raise future standards of living.
  • There is an economic role for government to play in a market economy whenever the benefits of a government policy outweigh its costs. Governments often provide for national defense, address environmental concerns, define and protect property rights, and attempt to make markets more competitive. Most government policies also redistribute income.
  • Costs of government policies sometimes exceed benefits. This may occur because of incentives facing voters, government officials, and government employees; because of actions by special interest groups that can impose costs on the general public; or because social goals other than economic efficiency are being pursued.
  • Cost and benefit analysis is complex and involves placing value on both tangible
  • and intangible factors when making policy decisions
  • A nation’s overall levels of income, employment, and prices are determined by the interaction of spending and production decisions made by all households, firms, government agencies, and others in the economy.
  • Unemployment imposes significant personal costs on individuals and families.  It can also place a heavy burden on governments. Unexpected inflation imposes costs on many people and benefits some others because it arbitrarily redistributes purchasing power.
  • In the United States, federal government budgetary policy and the Federal Reserve System’s monetary policy influence the overall levels of employment, output, and prices.
  • The assumptions and values on which economic theory and public policy are based require careful analysis

Discipline: Social Studies
Domain: All Thematic Standards
Cluster: Production, Distribution, and Consumption
Grade(s): Grades K–12

Teachers should:

  • enable learners to explain how the scarcity of productive resources (human, capital, technological, and natural) requires the development of economic systems to make decisions about how goods and services are to be produced and distributed
  • help learners analyze the role that supply and demand, prices, incentives, and profits play in determining what is produced and distributed in a competitive market system
  • help learners compare the costs and benefits to society of allocating goods and services through private and public means
  • assist learners in understanding the relationships among the various economic institutions that comprise economic systems such as households, businesses, banks, government agencies, labor unions, and corporations
  • guide learner analysis of the role of specialization and exchange in economic processes
  • provide opportunities for learners to assess how values and beliefs influence private and public economic decisions in different societies
  • have learners compare basic economic systems according to how they deal with demand, supply, prices, the role of government, banks, labor and labor unions, savings and investments, and capital
  • challenge learners to apply economic concepts and reasoning when evaluating historical and contemporary social developments and issues
  • enable learners to distinguish between domestic and global economic systems, and explain how the two interact
  • guide learners in the application of economic concepts and principles in the analysis of public issues such as the allocation of health care or the consumption of energy, and in devising economic plans for accomplishing socially desirable outcomes related to such issues
  • help learners critically examine the values and assumptions underlying the theories and models of economics
  • help learners to distinguish between economics as a field of inquiry and the economy