Lesson Plan

• Describe the distinction between expenditure‑switching and expenditure‑reducing policies.
• Explain how each policy type influences the balance of payments.
• Compare the macro‑economic impacts, time lags and political feasibility of the two approaches.
• Evaluate which policy mix is appropriate for different BoP disequilibrium scenarios.

• Projector and screen
• PowerPoint slides summarising key concepts
• Handout with the comparison table of policies
• Worksheet for group case‑study analysis
• Whiteboard and markers

Begin with a quick poll: “What would happen to a country’s trade balance if its currency suddenly depreciated?” Connect this to students’ prior study of balance of payments and exchange‑rate effects. Explain that by the end of the lesson they will be able to differentiate expenditure‑switching from expenditure‑reducing policies and justify their use.

1. Do‑now (5’) – Students write their poll responses on sticky notes; teacher collects and displays a quick summary.
2. Mini‑lecture (10’) – Review BoP disequilibrium and introduce the two policy categories with definitions and key instruments.
3. Guided analysis (12’) – In small groups, students examine the comparison table and fill a worksheet linking each instrument to current‑account, GDP and inflation effects.
4. Case‑study simulation (15’) – Present a scenario of an over‑valued currency; groups decide on a policy mix, justify their choice, and note potential side‑effects.
5. Whole‑class debrief (8’) – Groups share recommendations; teacher highlights misconceptions and reinforces objectives.
6. Quick check (5’) – Exit ticket: one sentence defining each policy type and providing an example.

Summarise that expenditure‑switching changes relative prices while expenditure‑reducing cuts overall demand, each with distinct trade‑offs. Collect the exit tickets to gauge understanding. For homework, assign a short essay analysing a recent real‑world BoP adjustment and recommending an appropriate policy mix.