Lesson Plan

• Describe why governments buy and sell foreign currencies.
• Explain the different types of government intervention in currency markets.
• Analyse the short‑run effects of direct and sterilised interventions on exchange rates and the money supply.
• Evaluate potential risks such as reserve depletion and inflation.

• Projector and screen
• Whiteboard and markers
• Printed handout summarising intervention types
• Worksheet with a case‑study scenario
• Calculators

Imagine a country trying to keep its currency stable while global markets fluctuate. Students should already understand basic supply‑and‑demand in foreign‑exchange markets. Today they will explore why governments intervene and how they do it. Success will be measured by their ability to identify motives, methods, and likely outcomes of intervention.

1. Do‑now (5') – Quick Kahoot quiz on exchange‑rate fundamentals.
2. Mini‑lecture (10') – Present the six reasons governments trade in foreign currencies and introduce the four intervention types.
3. Interactive table activity (12') – In pairs, match each intervention type with its method and typical objective using the handout.
4. Case‑study simulation (15') – Role‑play a central bank defending a fixed exchange rate; record changes in reserves and currency value.
5. Think‑pair‑share (5') – Discuss possible short‑run consequences and longer‑run risks.
6. Exit ticket (3') – Write one short answer: “What is the main risk of unsterilised intervention?”

We recap the motives for government intervention, the methods used, and the trade‑offs involved. Students hand in their exit tickets, which provide a quick retrieval check. For homework, each student will research a recent real‑world currency intervention and write a brief summary of the motive, method, and outcome.