Lesson Plan

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Lesson Plan
Grade: Date: 17/01/2026
Subject: Economics
Lesson Topic: The determination of the equilibrium foreign exchange rate
Learning Objective/s:
  • Describe the components of demand and supply in the foreign‑exchange market.
  • Explain how income, interest rates, relative prices and expectations shift the FX demand and supply curves.
  • Calculate the equilibrium foreign exchange rate using linear demand and supply equations.
  • Analyse the impact of determinant shifts on the equilibrium rate and its economic implications.
Materials Needed:
  • Projector and screen
  • Whiteboard and markers
  • Printed handout with FX market diagram
  • Worksheet with practice calculations
  • Calculator for each student
  • PowerPoint slides covering determinants
 Introduction:
Imagine traveling abroad and noticing how the price of a dollar can change overnight. Students should already know what a foreign exchange rate is and the basic idea of supply and demand. By the end of the lesson they will be able to identify the key determinants, draw demand‑supply curves, and solve for the equilibrium rate.
Lesson Structure:
  1. Do‑now (5') – quick quiz on basic FX concepts.
  2. Mini‑lecture (10') – introduce demand and supply determinants using slides.
  3. Guided example (10') – solve linear demand and supply equations to find equilibrium.
  4. Group activity (15') – each group shifts either the demand or supply curve, redraws the market and predicts the new equilibrium.
  5. Check for understanding (5') – exit‑ticket question: “What determinant would cause the FX rate to appreciate and why?”
  6. Summary (5') – recap key take‑aways and link to real‑world exchange‑rate volatility.
Conclusion:
We revisited how demand and supply interact to set the equilibrium foreign‑exchange rate and how shifts move that equilibrium. Students complete an exit ticket stating one determinant and its effect, and for homework they finish a worksheet calculating equilibrium rates under different scenarios.