Empowering Global Citizens

Overview
Through this unit, students learn about core economic concepts associated
with the international exchange market and about how fluctuations are dy—

namic and affect trade, investment, and overall growth in countries.

Activity DE.2.1

Exchange Rates

Using auctions and simulations as outlined in lesson plans by the IMF, stu—
dents learn about the demand and supply of foreign currency and how ex—
change rates are determined. Use the following lesson plans:

0 http://www.imf.org/external/np/exr/center/students/hs/think/
lesson7.pdf

0 http://www.imf.org/external/np/exr/center/students/hs/think/
lesson7.pdf

Through these lesson plans, students also get a conceptual understanding of
fixed and flexible exchange rates and the various factors that cause changes

in flexible exchange rates.

(Note that based on the simulations, the teacher can build in circumstances
that force the students to think further about the factors that cause changes
in flexible exchange rates.)

Students visit www.xe.com, which has a record of exchange rates between

various countries since 1995, and examine some of the trends in the ex—

change rates of countries in Latin America.

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