Lesson Plan

• Describe the main macroeconomic objectives targeted by monetary policy.
• Explain how the primary monetary policy tools influence interest rates, inflation, and output.
• Analyze the transmission mechanisms through which monetary policy affects the economy.
• Evaluate the constraints and limitations that affect policy effectiveness.
• Apply the policy‑tool impact summary to a real‑world case study (e.g., 2008 financial crisis).

• Projector and screen
• PowerPoint slides on objectives, tools, and transmission
• Printed handout with transmission‑mechanism diagram
• Worksheet containing case‑study questions
• Calculators
• Whiteboard and markers

Begin with a brief news clip showing a recent central‑bank rate decision to capture interest. Ask students what they already know about why central banks intervene in the economy. Explain that today they will uncover how monetary policy aims to meet key macroeconomic goals and how its effectiveness can vary.

1. Do‑now (5'): Students list the macroeconomic goals they think central banks pursue; quick share.
2. Mini‑lecture (10'): Overview of monetary policy objectives and the main tools (OMO, discount rate, reserve requirements, forward guidance, QE) using slides.
3. Transmission activity (12'): In small groups, students label the four transmission channels on the handout diagram and discuss real‑world examples.
4. Case‑study analysis (15'): Examine the 2008 Global Financial Crisis response; complete worksheet questions on tool mix and outcomes.
5. Whole‑class debrief (8'): Discuss constraints (time lags, liquidity trap, credibility) and trade‑offs illustrated by the Phillips curve.
6. Exit ticket (5'): Each student writes one strategy a central bank could use to boost policy credibility.

Summarise how monetary policy tools aim to achieve employment, price stability, and growth, while noting key limitations. Collect exit tickets as a quick retrieval check, and assign homework: research a recent monetary‑policy decision and write a short reflection on its expected impact on inflation and output.