Lesson Plan

• Describe the three components of the balance of payments and their relevance to macro‑economic stability.
• Explain why governments aim for BoP stability and the macro‑economic consequences of large deficits or surpluses.
• Identify and evaluate at least three policy tools used to achieve BoP stability.
• Compare fixed, managed, and floating exchange‑rate regimes in terms of their impact on BoP stability.
• Analyse the trade‑offs and side‑effects associated with BoP policies.

• Projector and screen
• PowerPoint slides summarising BoP components and policies
• Printed worksheet with a simplified BoP table
• Calculators
• Whiteboard and markers
• Exit‑ticket cards

Begin with a quick “What’s in your wallet?” poll to highlight everyday links to foreign transactions. Review the definition of the balance of payments and ask students to recall why exchange‑rate swings matter. State that by the end of the lesson they will be able to explain how governments keep the BoP stable and evaluate the tools they use.

1. Do‑now (5'): Students match BoP components (current, capital, financial) to examples on the board.
2. Mini‑lecture (10'): Explain why BoP stability is a macro‑economic aim, using the earlier poll results.
3. Interactive table activity (15'): In pairs, students fill a worksheet identifying policy tools, targeted BoP component, expected effect and possible side‑effects.
4. Exchange‑rate regime comparison (10'): Whole‑class discussion of fixed, managed float, and floating systems with a quick pros‑cons chart.
5. Check for understanding (5'): Kahoot quiz covering definitions, reasons for stability, and policy impacts.
6. Application task (10'): Students analyse a short case (e.g., country with a large deficit) and recommend a mix of two policies, justifying trade‑offs.

Recap the key points: BoP components, why stability matters, and the main policy tools and exchange‑rate regimes. Students complete an exit ticket stating one policy they would choose for a deficit‑prone economy and why. Assign homework to research a real‑world example of a government intervening to stabilise its BoP.