Lesson Plan

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Lesson Plan
Grade: Date: 17/01/2026
Subject: Economics
Lesson Topic: changes in the exchange rate under different exchange rate systems
Learning Objective/s:
  • Describe how exchange rates are determined under each major exchange‑rate regime.
  • Explain how a domestic inflation shock affects the exchange rate in fixed, floating, managed float, crawling peg, currency‑board and dollarisation regimes.
  • Analyse the policy tools available to governments or central banks to influence exchange‑rate movements under each system.
  • Evaluate the advantages and disadvantages of each regime in terms of stability, monetary autonomy and external vulnerability.
Materials Needed:
  • Projector and screen
  • PowerPoint slides summarising each regime
  • Printed handout of the comparison table (systems, drivers, policy tools)
  • Worksheet with shock‑analysis questions
  • Whiteboard and markers
  • Calculators (optional)
 Introduction:
Imagine a country suddenly runs out of foreign reserves – what happens to its currency? Students should already know the definition of an exchange rate and the basic PPP formula. By the end of the lesson they will be able to explain and compare how exchange rates change under different regimes and identify the key policy tools available.
Lesson Structure:
  1. Do‑now (5') – quick quiz on exchange‑rate definition and PPP.
  2. Mini‑lecture (10') – overview of the six exchange‑rate systems with key diagrams.
  3. Guided analysis (15') – pairs examine the comparison table, identify primary drivers and policy tools for a given shock.
  4. Whole‑class discussion (10') – compare regime responses, clarify misconceptions.
  5. Application activity (15') – case study: domestic inflation shock; students predict exchange‑rate movement for each regime and justify using policy tools.
  6. Check for understanding (5') – exit ticket: one sentence summarising the most effective tool in a floating regime.
Conclusion:
We recap how each regime determines exchange‑rate movements and the policy levers available. Students hand in their exit tickets and receive a brief verbal summary. For homework, they complete the worksheet analysing a devaluation shock under a fixed peg and write a short paragraph on the pros and cons of a currency board.