Teaching the New Tools of Monetary Policy
Resources for teaching the Fed's monetary policy tools in an ample-reserves framework.
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Some countries have experienced such high inflation rates that their money became worthless. Imagine going to the store with boxes full of money and not being able to buy anything with it because prices have gotten so high! This video assignment explains what happens when inflation gets out of control.
Why does the Fed care about inflation? We now know what inflation is and how that impacts you. But if it means prices will go up, why do we want it at all? Well, a little bit of inflation is actually a good thing. It means the economy is firing on all cylinders. There are plenty of jobs and people aren't hesitating to spend their money on goods and services. Inflation can't be left unchecked, though. Without someone watching over it, prices could rise dramatically, possibly leading to rapid and out of control price increases called hyperinflation. When this happens, the economy can suffer because people wouldn't be able to keep up with skyrocketing prices. So who keeps an eye on inflation to make sure this doesn't occur? Enter the Federal Reserve and their Center for Inflation Research in Cleveland. The Fed's expert policymakers and economists make sure inflation isn't too high or too low, usually about 2%. They use controls such as setting interest rates that help to slow down or speed up the rate of inflation. With the help of the Federal Reserve, there's just the right amount of inflation. The economy stays on track, and that orange is a little easier to buy. Want to learn more about inflation? Visit us at clevelandfed.org/inflation101.
Teaching the New Tools of Monetary Policy
Resources for teaching the Fed's monetary policy tools in an ample-reserves framework.
The Fed's New Monetary Policy Tools
Explore the new monetary policy tools of the Fed.
The Economic Goal of Price Stability
Simulate a consumer's experience when dealing with unstable prices.
Infographic Posters
Infographics for your classroom
Econ Lowdown Podcast Series
21 Economics audio assignments for your classroom
Beyond Inflation Numbers: Shrinkflation and Skimpflation
Define shrinkflation and skimpflation.
What Is Inflation?
Learn what is and what is not inflation.
Why Should You Care About Inflation?
Explain how inflation affects consumers' incomes, spending, and wages.
Disinflation, Explained!
Explain disinflation and how it differs from deflation.
Shrinkflation, Explained!
Introduce the term "shrinkflation".
Stagflation, Explained!
Introduce the term "stagflation".
Hyperinflation, Explained!
Introudce the term "hyperinflation"
Deflation, Explained!
Introduce the term "deflation".
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