Active learning ideas
Exchange rates determine the value of one currency against another, playing a pivotal role in Ireland's international competitiveness. Students examine the factors that influence exchange rates, such as interest rates, inflation, and trade balances. They analyze the difference between fixed, floating, and managed exchange rate systems.
Activity 01
Students use the 'Big Mac Index' to compare the purchasing power of different currencies. They calculate whether the Euro is overvalued or undervalued against the Dollar and Sterling based on the price of a burger.
How does a strong Euro affect Irish exports to the US and UK?
Activity 02
Students act as Irish farmers exporting beef to the UK. They must react to a sudden drop in the value of Sterling, deciding whether to raise prices (risking sales) or keep prices the same (risking profits).
What factors determine a country's exchange rate?
Activity 03
Students imagine they are planning a trip to New York. They discuss how a strengthening Euro would change their 'spending power' for hotels and shopping, then relate this back to national import costs.
How can Irish firms maintain competitiveness globally?
A few notes on teaching this unit
Watch Out for These Misconceptions
A 'strong' currency is always good for the economy.
A strong Euro makes Irish exports more expensive for foreigners, which can hurt our manufacturing and farming sectors. Using a 'balance of trade' simulation helps students see the trade-offs between consumers and producers.
Exchange rates are set by governments.
In a floating system like the Euro, rates are determined by market demand and supply. A classroom 'currency market' game where students trade 'classroom tokens' for 'real-world treats' can demonstrate how demand drives value.
Methods used in this brief
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Exploring the theories of absolute and comparative advantage and their relevance to Ireland's export-driven economy.
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Globalisation and Multinational Companies (MNCs)
Assessing the impact of globalisation and foreign direct investment (FDI) on the Irish economy and employment.
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