Lesson Plan

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Lesson Plan
Grade: Date: 17/01/2026
Subject: Economics
Lesson Topic: How monetary policy measures may enable a government to achieve its macroeconomic aims
Learning Objective/s:
  • Describe the purpose of monetary policy and its macro‑economic objectives.
  • Explain how each of the three primary instruments (OMO, discount rate, reserve requirements) affect interest rates and aggregate demand.
  • Analyse the transmission mechanism linking policy actions to outcomes such as inflation, unemployment, growth, and balance of payments.
  • Evaluate the limitations and challenges of monetary policy in achieving government aims.
  • Apply knowledge to a scenario by selecting appropriate policy measures to address a given macro‑economic problem.
Materials Needed:
  • Projector or interactive whiteboard for slides/diagrams
  • Printed handout summarising instruments and the transmission mechanism
  • Worksheet with scenario questions
  • Calculator (optional) for simple calculations
  • Whiteboard and markers for class modelling
  • Short video clip on central‑bank operations (optional)
 Introduction:
Begin with a quick poll: “What would happen to the price of a house if interest rates fell?” This links to students’ prior knowledge of borrowing costs. Explain that today they will explore how the central bank’s monetary tools can help the government meet its macro‑economic targets. Success will be measured by their ability to trace the transmission mechanism and propose suitable policy actions.
Lesson Structure:
  1. Do‑now (5’) – Students answer a short question on interest rates and write a quick definition of monetary policy on sticky notes.
  2. Mini‑lecture (10’) – Present the three instruments using slides and an AD‑AS diagram.
  3. Guided practice (12’) – In pairs, analyse a provided scenario (e.g., high inflation) and decide which instrument(s) to use; complete a worksheet.
  4. Transmission mechanism activity (8’) – Whole‑class flowchart on the board; students add each step and discuss effects on aggregate demand.
  5. Limitations discussion (5’) – Think‑pair‑share on time lags, liquidity trap, and credibility.
  6. Check for understanding (5’) – Exit ticket: one sentence describing how a change in the discount rate can reduce unemployment.
  7. Homework briefing (2’) – Assign a short essay to evaluate monetary policy’s role in balancing growth and inflation.
Conclusion:
Summarise how the central bank’s tools move through the transmission mechanism to influence the government’s macro‑economic aims. Ask students to write one key takeaway on a slip of paper as an exit ticket. For homework, they will write a brief case‑study analysis of a recent monetary‑policy decision in their own country.