Tag Flip

Tag Flip: appreciation, depreciation, revaluation and devaluation for Edexcel IGCSE Economics

This free game is part of our Pearson Edexcel IGCSE Economics (4EC1) course for exams in EXAM YEARS 2027-2030.

Run the Exchange Gate

Tag Flip is a free 3D game about exchange rates for Pearson Edexcel International GCSE Economics (4EC1). It covers specification point 2.2.3 (c) and (d): the definitions of appreciation, revaluation, depreciation and devaluation, and the impact of a change in the exchange rate on import and export prices, on the demand for imports and exports, and on the current account of the balance of payments.

You run the trade desk at the Exchange Gate, between Britain’s Port of Glenhaven and America’s Port of Bayview. Every cargo ship stops at the gate, and the big board on the Exchange Tower shows how many dollars one pound buys. When the rate changes, you flip each ship’s price tag up or down: what will American buyers now pay in dollars for a British machine, and what will UK shoppers now pay in pounds for an American jacket? Isla, the trade desk chief, explains each new idea on a video call as you play.

Whose price changes?

This is the part students most often get wrong, and the game makes you do it again and again until it sticks. A Glenhaven firm sells a machine for £30,000, and that price is locked on the tag. At £1 = $1.25 an American buyer pays £30,000 × 1.25 = $37,500. When the pound appreciates to $1.50, the same machine costs £30,000 × 1.50 = $45,000, so the export price in dollars rises. An American jacket priced at $60 costs a UK shopper $60 ÷ 1.25 = £48, but only $60 ÷ 1.50 = £40 after the appreciation, so the import price in pounds falls. Every tag rolls to its new price with the working shown, so you see the multiply and divide method each time.

From round 2 some tags show the seller’s own price instead, and the right answer is SAME: an exchange rate change does not change the price in the seller’s currency, only the price in the buyer’s currency. That is exactly the “say whose currency you mean” mistake examiners warn about.

Follow the chain to the current account

After each wave of ships you make three calls. Does the demand for UK exports in America rise or fall? Does the demand for imports into the UK rise or fall? Does the UK’s current account move towards surplus or towards deficit? Get it right and you watch it happen: American buyers walk away from or crowd into the British Goods store in Bayview, UK shoppers flock to or leave the American Goods store in Glenhaven, and gold coins pour onto a giant brass scale on the quay, money in from exports on one side and money out on imports on the other, until it tips.

The three rounds build up one idea at a time. In Strong pound the market pushes the pound up (appreciation) and every step is guided. In Swinging pound the pound depreciates and then bounces back, a gate clock starts ticking, and you predict demand and the current account before you see them change. In Fixed rate the government fixes the pound and then changes it: a fall it chooses is devaluation and a rise is revaluation, with the same effects on trade. The game ends with two exam-style questions, including the calculation from the lesson, and a trade bulletin with the full summary table.

Exam tips the game drills

• Appreciation and depreciation are changes set by the market (a floating exchange rate). Revaluation and devaluation are decisions by the government or central bank (a fixed exchange rate).
• After an appreciation or revaluation, export prices rise in foreign currency and import prices fall in home currency. Demand for exports falls, demand for imports rises, and the current account moves towards deficit.
• After a depreciation or devaluation, it is all the other way round, and the current account moves towards surplus.
• To work out a new price, multiply pounds by the rate to get dollars, and divide dollars by the rate to get pounds.
• For an ‘explain’ question, follow the chain: exchange rate, then prices, then demand, then the current account. Use “likely”: how much demand changes depends on price elasticity.