Lesson 2: Banking System & Money Creation
Duration of Days: 4
Lesson Objective
Students will explain how banks create money through lending and the money multiplier process.
How does fractional reserve banking work?
Why does lending increase the money supply?
C3: D2.Eco.10.9-12
CCSS: RH.11-12.7
DOK 3 – Strategic Thinking
Students analyze the role of banks in expanding the money supply and evaluate the implications of lending behavior.
Step-by-step modeling
Visual flowcharts
Practice with scaffolds
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Money multiplier practice problems