At a family meeting tonight, you were told you are going on a surprise family vacation. Before you leave, you will be given clues about where you are going. You will have to identify the countries you will visit, identify the capital of the country, and determine how much money in U.S. dollars you will spend in each country. You will need to use exchange rates to figure out the actual cost of each place you visit. Finally, you will add up the total cost of the trip to determine how much the trip cost.
You will use several websites to help you identify the foreign countries that you will visit. Some websites also will help you to learn about exchange rates. You will use the exchange rates to figure out how much money you will spend in each country and on the entire trip. This will help you gain a perspective on the impact the exchange rate has on the economy.
Read this article on 'How Exchange Rates Work' before beginning the activity and be prepared to answer the questions below:
- How could a person buy items with cash if they went to another country?
- How would a person get the currency from another country?
- How would a person know how much foreign currency an American dollar is worth?
- What does the phrase "exchange rate" mean?
Using the materials provided by your teacher, you and your group members will identify your vacation stops, the capital of each country, and the amount of money you spent in each country in U.S. dollars. You will use the clues handout page to help you identify each place; you will use the vacation log sheet to record your answers. If your teacher is using the exchange rates provided with this lesson, you will receive that page also. If you are using a website to determine exchange rates, you will use the website listed first below.
The currency converter website will help you calculate exchange rates.
This formula can also be used to calculate exchange rates:
You have now completed your worldwide family vacation. You have used exchange rates to determine how many U.S. dollars you spent on this trip. It cost a lot of money, but the memories will last a lifetime. You will need some time to rest and relax before getting back to your normal routine.
Think about how different exchange rates affect your purchasing power as you travel abroad. Share your thoughts with another student in your group.
Using the currency converter website, practice converting U.S. dollars into the currency of at least five different countries.
Discuss with your group members why you think the exchange rates vary between countries.