About This Chapter
Below is a sample breakdown of the Foreign Exchange and the Balance of Payments chapter into a 5-day school week. Based on the pace of your course, you may need to adapt the lesson plan to fit your needs.
|Day||Topics||Key Terms and Concepts Covered|
|Monday||Foreign currency exchange and the exchange rate||Inverse relationship, curve shift and slope, foreign exchange market, fixed, flexible and partially flexible rates|
|Tuesday||Currency appreciation and depreciation||Relative increase or decrease in value, cheaper imports, lowered inflation, trade deficit balance, weak exchange rate effects|
|Wednesday||The effects of fiscal and monetary policies on exchange rate||Government spending and taxes, expansionary policy, interest rates, Federal Reserve, income, prices|
|Thursday||How currency change affects imports, exports and trade balance||Relative strength of dollar, value of exports vs. value of imports,|
|Friday||Balance of payments||Balance of payments, goods, services, income, current transfers; capital, domestic and foreign investment, credit, surplus, deficit|
1. Foreign Currency Exchange: Supply and Demand for Currency
In this lesson, you'll learn why money from different countries has different values of exchange. We'll cover the supply and demand for currencies and how changes in supply and demand can affect the exchange rates between currencies.
2. Exchange Rate: Determination and Conversion Across Countries
Understand what exchange rates are and the different types that can be used by governments and countries. See how they operate and how the conversion process works across countries.
3. Currency Appreciation & Depreciation: Effects of Exchange Rate Changes
Find out how changes in the exchange rate can affect the economy and your own individual situation. Discover how these currency changes can increase and decrease your purchasing power and standard of living.
4. How Fiscal and Monetary Policies Affect the Exchange Rate
Discover how fiscal and monetary policy can affect the exchange rate and ultimately the amount of money it costs you to buy goods and services. Find out the three paths that both fiscal and monetary policy can travel to impact the exchange rate.
5. How Currency Changes Affect Imports and Exports
Learn about how currency changes can affect imports and exports. Find out how this affects you. Discover what happens when a dollar is strong compared to other currencies and what happens when it is weak.
6. Achieving Trade Balance: Trade Deficit and Surplus Examples
Find out what trade balance, trade deficit, and trade surplus are. Learn about some recent examples that help clarify trade deficit and surplus. Explore what countries have a surplus and what countries have a deficit.
7. Balance of Payments: Current Account & Measuring Foreign Trade
Find out what the current account is and the four main foreign trade components that it is comprised of. Similar to your bank account, learn how the current account is measured and what a deficit and surplus mean when talking about this economic indicator.
8. Balance of Payments with Financial Accounts: Measuring Foreign Trade
Learn about the balance of payments and the two key components that make it up. Discover what the financial/capital account is and how it relates to foreign trade and surpluses and deficits.
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Other chapters within the Macroeconomics Syllabus Resource & Lesson Plans course
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