Status of US Economy Today?

Overview

A stable U.S. economy relies on indicators such as consumer spending, unemployment, product development, tax cuts and energy costs. When in flux, these factors shift the nation's economic status. What sustains a steady economy? What happens when our country's economic base is not solid? After reading Federal Reserve Chairman Alan Greenspan's predictions, students can also predict what could happen over the next six months if America does not revisit its fiscal policies based on the financial conditions that influence them.

Curriculum connections: Economics, government, mathematics

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Introduction to economics teaching


Marketing microeconomics


Balancing Keynesian and classical ideas


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Objectives

Students will be able to:


Explain the factors that influence the U.S. economy and their present status after reading the CNNfyi.com article "Fed could cut again."


Research and chart data that lead to predictions about our nation's economic status by creating a graph.


Predict the status of the U.S. economy over the next six months by creating and presenting a financial report in the role of Alan Greenspan.

Standards

High School (Grades 9-12)

Mid Continent Research for Education and Learning (McREL)

Economics Standard 8: Students understand basic concepts of United States fiscal policy and monetary policy; that changes in the money supply lead to changes in interest rates and in individual and corporate spending which may influence the levels of spending, employment, prices, and economic growth in the economy; and that fiscal policies take time to affect the economy and that they may be reinforced or offset by monetary policies and changes in private investment spending by businesses and individuals.

Mathematics Standard 6: Students understand and apply basic and advanced concepts of statistics and data analysis. They select and use the best method of representing and describing a set of data (i.e., scatter plot, line graph, two-way table).

Materials

CNNfyi.com article "Fed could cut interest rates again"
Internet access
Samples of Alan Greenspan's semi-annual economic reports
Sample economy-based graphs or statistical charts (see listed websites)
Newspaper articles and magazines focused on the U.S. economy
Graph paper
Three-ring binders or manila folders (enough for each group, as explained in the procedures)

Suggested time

Article and questions only: 30 minutes

Full lesson plan: Two to three classroom periods

Procedures

1. Ask students to brainstorm a list of factors that critically affect the U.S. economy. Chart their responses and then ask them to categorize the factors under headings, such as consumer spending, unemployment, energy costs, stock market, etc. Explain that recent fluctuations across financial sectors have had an impact on the country's economic status. Provide background on recent decisions -- and their causes -- regarding federal interest rates and financial trends.

2. Direct students to read the CNNfyi.com article "Fed could cut interest rates again" and then respond to and discuss the following questions:



Who is Alan Greenspan? How does he view the current status of the U.S. economy? What has he recommended the federal government do to avoid recession?


What are interest rates? What impact could a reduction in interest rates have on the economy? What happens to the economy when interest rates are higher?


What factors affect the nation's current economic activity? How will these factors influence the economy as the year progresses?


While Greenspan is considering reducing interest rates, what circumstances seem to contradict the need for this reduction? What is the role of business in the current economy? How has the economy affected your family's or your finances and spending?

3. Ask students to return to the list they created in Step 1 and add other categories highlighted in the article. Divide the class into enough groups representing each of the selected categories. Direct students to Internet and print resources providing statistical data on their respective categories. (Students can research these, but because of the topic's complexity, teacher guidance is recommended to jump start the task.)

4. Have students create graphs (line, pie, bar, etc.) that document changes in their categories over the last year to the present. Photocopy each group's completed graph so that each group can have a copy. Create a packet of graphs students will put into a three-ring binder or manila folder.

Assessment

Each group reviews the graph collection to analyze and synthesize data in order to determine the status of the U.S. economy over the next six months. Modeling Alan Greenspan's twice-yearly economic report (have students read examples), students create similar group reports to predict how the economy will fare over the next six months, and make recommendations on how to sustain and or strengthen it. A group representative, in the role of Alan Greenspan, presents predictions and recommendations to the class.

Accommodations

Students can compile statistics from 1990-2001 on one factor that influences America's economy, such as consumer spending, labor, Gross Domestic Product, inflation, etc. They can then create accompanying line or bar graphs that document the fluctuating selected factor's rates.

Challenge

The status of the U.S. economy has both domestic and international implications. Conduct research to determine the economic relationship between other countries and America and how these partnerships support or weaken financial structures and processes. What happens overseas when America's economy is struggling? Or when other nations are experiencing economic obstacles? What factors are most affected by domestic and international economic downfall? What domestic and international circumstances contribute to this downfall?

Source:
http://cnnstudentnews.cnn.com/2001/fyi/lesson.plans/07/18/economic.greenspan/index.html