Lesson Plan

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Lesson Plan
Grade: Date: 17/01/2026
Subject: Economics
Lesson Topic: relationship between the internal value of money and the external value of money
Learning Objective/s:
  • Describe the internal and external values of money and how they are measured.
  • Explain how changes in internal value affect exchange rates and key macro‑economic variables.
  • Analyse the links between inflation, unemployment and the balance of payments through the internal/external value relationship.
  • Apply the quantity theory of money and PPP to predict policy impacts on currency value.
  • Evaluate policy trade‑offs when targeting one macro problem and its effects on the others.
Materials Needed:
  • Projector or interactive whiteboard
  • Slide deck with key concepts and formulas
  • Handout containing the summary table and diagram
  • Calculator or spreadsheet for quick calculations
  • Whiteboard markers and student notebooks
 Introduction:
Begin with a quick poll asking students which factor they think most influences the price of imported goods. Review their prior knowledge of purchasing power and exchange rates, then state that today they will uncover how the internal and external values of money are linked and why this matters for inflation, unemployment and the balance of payments.
Lesson Structure:
  1. Do‑now (5'): Quick quiz on purchasing power and exchange rates – checks prior knowledge.
  2. Mini‑lecture (15'): Define internal and external values, present determinants and key equations (MV=PY, PPP).
  3. Guided analysis (10'): Walk through an example showing how domestic inflation leads to currency depreciation via PPP.
  4. Group activity (15'): Teams evaluate a monetary‑tightening scenario and predict impacts on internal value, external value, inflation, unemployment and the BoP.
  5. Whole‑class discussion (10'): Teams share findings; teacher clarifies misconceptions.
  6. Summary & exit ticket (5'): Students write one sentence linking internal and external values to a macro problem; collect for formative assessment.
Conclusion:
Recap the two‑sided nature of money’s value and how shifts in one side ripple through inflation, unemployment and the balance of payments. Collect the exit tickets as a quick retrieval check, then assign a short homework: each student finds a recent exchange‑rate movement, explains the underlying internal‑value change, and predicts its macro‑economic implications.