2. As a class, read and discuss the article "Ancient Secret System Moves Money Globally," focusing on the following questions:
a. What method does Tarir Khan use to transfer money from one country to another?
b. What does 'hawala' mean in Arabic?
c. How does the hawala system work, according to the article? Why can't the transactions be easily traced?
d. Why are law enforcement authorities investigating the September 11, 2001 attack interested in tracking this kind of money transfer?
e. According to Finance Minister Shaukut Aziz, how much money moves through Pakistan in a year through the hawala system?
f. What other countries does the article identify as places where hawala is frequently used to move money?
g. Why does Mr. Khan say, "it is very difficult to talk about" specific details of the hawala system?
h. According to the article, from where does most of the profit come for hawala merchants?

3. Prompt the class with a few examples of current exchange rates (written on the board), and as a class, discuss the following questions:
-What is an exchange rate? (The ratio of one currency valued against another).
-What is the base currency and what is the counter currency? (The base currency is the first currency in the ratio, and the counter currency is the second)
-When buying a currency, what does the exchange rate indicate? (How much of the counter currency you have to pay for one unit of base currency). What does the exchange rate indicate when selling currency? (How much of the counter currency you will get in exchange for one unit of base currency).
-Why does the value of an exchange always need to be defined in relation to another value?

Next, ask the students to pick a foreign country, by either spinning a globe and stopping it with a finger until it lands on a country, or by closing their eyes and pointing to a place on a world map. The country each student "lands" on will be his or her assigned country. Ask each student to begin by determining the currency used in this country. [You may want to point students to the CIA World Factbook ]

Then, divide students into pairs by counting off in 1's and 2's. Each pair will use an online currency calculator to define the exchange rate. [Refer to a Currency Converter, such as the one provided by OANDA]. Each pair answers the following questions:
-What is the exchange rate if Student 1 bids for the currency held by Student 2?
-What is the reciprocal rate (if Student 2 bids for currency held by Student 1)?

Tell students that each has 10,000 units of currency to exchange with his or her partner for another currency. In each transaction, students must always sell all the currency available.
Step 1: If Student 1 sells 10,000 units of currency to Student 2, what is cost to student 2?
Step 2: If the market rate of currency 1/currency 2 decreases by .02%, and Student 1 buys back 10,000 units, who makes a profit? How much?
Step 3: Rotate the pairs, so every Student 1 performs the same exchange with another Student 2, repeating the first two steps. This time, Student 1 must sell all the units available, and Student 2 may or may not have to borrow currency from a "bank" to match the exchange. Ask students to keep track of the changes in the value of his or her currency through at least three rounds of exchanges.

4. WRAP-UP/HOMEWORK: At home, each student graphs the change of value of his or her currency, and writes a brief summary of the transactions, answering the following questions: "What was the outcome of each exchange? At the end of three rounds, did you record a profit or loss? Why? Which currency value was closest to the value of yours? What do you think might account for the differences in currency value between countries?"

1. Choose a country and write a general economic assessment for a company interested in trading in that country? What is the country's Gross Domestic Product? What industrial sectors is the GDP comprised of? What growth in GDP can be expected over the next year? Include any other factors that you think might affect the economic stability of the country, such as the make-up of its labor force, unemployment rate, energy production, government expenditures, economic relief from other countries, etc.

2. Pick a currency and track its fluctuation in value over a period of time. Include a summary statement of your speculation on what might account for the currency's ups and downs.

3. In the aftermath of the attacks of September 11, 2001, what was the affect on the world's stock markets? Write an article describing why this event would have a global impact on world trading.

4. Why is hawala illegal? Investigate the historical and cultural roots of this practice, and write a letter to the editor, editorial, or op-ed piece describing the complexities of this system. How can a practice based on trust between individuals be considered harmful to others in society? How can the system be abused? Would it work to regulate this system or would that be a contradiction?

Interdisciplinary Connections:
Fine Arts- Create a collage using pictures and photographs from various print sources entitled "Money Talks."

Language Arts- Choose one of the quotations below and write an essay describing how this writer understands the value of money to a society. Do you agree with the writer's definition? Alternatively, compare and contrast the three definitions of money. On what grounds do the three writers agree or disagree? "Money is not, properly speaking, one of the subjects of commerce, but only the instrument which men have agreed upon to facilitate exchange of one commodity for another. It is none of the wheels of trade: It is the oil which renders the motion of the wheels more smooth and easy. If we consider any one kingdom by itself, it is evident that the greater or less plenty of money is of no consequence." (David Hume "Of Money", 1752)
"There cannot, in short, be intrinsically a more insignificant thing, in the economy of society, than money; except in the character of the contrivance for sparing time and labour... The introduction of money does not interfere with the operation of any of the Laws of Value laid down in the preceding chapters... The relation of commodities to one another remain unaltered by money: the only relation introduced is to money itself; how much or how little money they will exchange for; in other words, how the Exchange Value of money itself is determined." (John Staurt Mill, Principles of Political Economy, 1848)
"The quantity theory of money thus rests, ultimately, upon the fundamental peculiarity which money alone of all human goods possesses - the fact that it has no power to satisfy human wants except a power to purchase things which do have such power." (Irving Fisher, Purchasing Power of Money, 1911)

Media Studies- What is globalization? Research the changes that have taken place in an underdeveloped nation over the last ten years, and write the script of a documentary that illustrates the far-reaching effects of a globalized economy.

Teaching with the Times- Follow the money trail. Create a scrapbook of articles describing how U.S. law enforcement and financial regulatory agencies are tracking the terrorists behind the attacks of September 11, 2001.

Other Information on the Web
CIA World Factbook

OANDA Currency converter

Academic Content Standards:
This lesson plan may be used to address the academic standards listed below. These standards are drawn from Content Knowledge: A Compendium of Standards and Benchmarks for K-12 Education: 2nd Edition and have been provided courtesy of the Mid-continent Research for Education and Learning in Aurora, Colorado.

In addition, this lesson plan may be used to address the academic standards of a specific state. Links are provided where available from each McREL standard to the Achieve website containing state standards for over 40 states. The state standards are from Achieve's National Standards Clearinghouse and have been provided courtesy of Achieve, Inc. in Cambridge Massachusetts and Washington, DC.

Grades 6-8

Economics Standard 2- Understands characteristics of different economic systems, economic institutions, and economic incentives. Benchmarks: Knows that in a market economic system, individual households and business firms make the major decisions about production and distribution in a decentralized manner following their own self-interests; Understands the types of specialized economic institutions found in market economies.
Connect to State Standard
Economics Standard 3- Understands the concept of prices and the interaction of supply and demand in a market economy. Benchmarks: Understands that relative prices and how they affect people's decisions are the means by which a market system provides answers to the basic economic questions: What goods and services will be produced? How will they be produced? Who will buy them?; Understands that the price of any one product is influenced by and also influences the prices of many other products; Understands that scarce goods and services are allocated in a market economy through the influence of prices on production and consumption decisions.
Connect to State Standard
Economics Standard 4- Understands basic features of market structures and exchanges. Benchmark: Understands that the United States government uses laws and regulations to maintain competition, but sometimes the government reduces competition unintentionally or in response to special interest groups.
Connect to State Standard

Grades 9-12

Economics Standard 3- Understands the concept of prices and the interaction of supply and demand in a market economy. Benchmarks: Understands that the supply of a product will normally change if there is a change in technology, in price of inputs, or in the prices of other products that could be made and sold by producers; Understands that when price controls are enforced, shortages and surpluses occur and create long-run allocation problems in the economy.
Connect to State Standard
Economics Standard 4- Understands basic features of market structures and exchanges. Benchmarks: Knows that collusion among buyers or sellers reduces the level of competition in a market and is more difficult in markets with large numbers of buyers and sellers; Understands that in the long run, the level of competition in an industry is determined largely by how difficult and expensive it is for new firms to enter the market and by consumers' information about the availability, price, and quantity of substitute goods and services; Understands that a natural monopoly exists when it is cheaper or one supplier to produce all of the output in a market than for two or more producers to share the output (e.g., electric companies); Understands that public service commissions typically regulate natural monopolies because people cannot rely on competition to control price and service levels in these cases.
Connect to State Standard

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