Lesson Plan

• Describe the three main exchange‑rate regimes and their key characteristics.
• Explain how exchange‑rate movements affect economic growth, inflation, unemployment, external balance and income distribution.
• Evaluate the advantages and limitations of fixed, floating and managed‑float regimes.
• Apply the Mundell‑Fleming framework to predict outcomes of exchange‑rate policy under different capital‑mobility assumptions.
• Analyse practical considerations (reserves, credibility, policy coordination) that policymakers must weigh.

• Projector and screen
• PowerPoint slides summarising regimes and impacts
• Printed handout of the regime comparison table
• Whiteboard and markers
• Calculator for quick conversions
• Worksheet with a case‑study country profile
• Internet access for up‑to‑date exchange‑rate data

Begin with a headline about recent currency volatility to capture interest. Ask students what they already know about how a country’s exchange rate can influence its economy. Explain that by the end of the lesson they will be able to identify the main regimes, analyse their macro‑economic effects, and justify policy choices.

1. Do‑now (5’) – Quick written response to a news excerpt on a sudden exchange‑rate move.
2. Mini‑lecture (10’) – Present the three regimes (fixed, floating, managed float) with visual slides.
3. Guided analysis (15’) – Using the printed table, students annotate how each regime impacts the five macro‑economic objectives.
4. Group activity (15’) – In small groups, apply the Mundell‑Fleming diagram to a case‑study country and recommend the most suitable regime, justifying with the earlier analysis.
5. Check for understanding (5’) – Exit ticket: list two advantages and two disadvantages of the chosen regime.

Summarise the key trade‑offs of each exchange‑rate regime and highlight the importance of credibility and reserve adequacy. Collect exit tickets and remind students that the homework is a brief essay comparing two regimes for a real‑world economy of their choice.