Lesson Plan

• Describe the two key macro‑economic aims: full employment and balance of payments stability.
• Explain how fiscal and monetary policies influence aggregate demand and the external sector.
• Analyse the trade‑off between achieving full employment and maintaining BOP stability using real‑world scenarios.
• Evaluate policy mixes, including exchange‑rate adjustments, that can reduce the conflict.
• Apply the open‑economy multiplier to predict the impact of fiscal expansion on output and the current account.

• Projector and screen
• Whiteboard and markers
• Printed handout of the policy‑tool table
• Worksheet with scenario analysis tasks
• Calculators
• Student laptops or tablets (optional)

Begin with a quick question: “What would happen if a country tried to create more jobs while its current‑account balance kept worsening?” Students recall their knowledge of AD/AS and fiscal/monetary policy. Explain that today they will identify why these goals can clash and how policymakers try to balance them.

1. Do‑now (5') – short quiz on the definitions of full employment and BOP stability.
2. Mini‑lecture (10') – review the four policy tools and their effects on AD and the BOP, using the handout.
3. Group activity (15') – students work on Scenario A and B, filling out a worksheet that links policy choice to outcomes.
4. Whole‑class debrief (10') – each group shares findings; teacher highlights the trade‑offs.
5. Case study (10') – examine Scenario C; draw an AD‑AS diagram showing how a depreciation can aid both aims.
6. Check for understanding (5') – exit‑ticket question: “Name one policy mix that could minimise the conflict.”

Summarise that fiscal and monetary actions often pull in opposite directions for employment and the current account, but strategic mixes and exchange‑rate moves can lessen the tension. Collect exit tickets and assign a brief homework: write a 150‑word response evaluating a real‑world policy decision that balanced these two aims.