" This is the kind of thing that native speakers know by instinct only and often can't explain in technical grammatical terms - like I'm having trouble explaining this. "That" just "sounds better" to my ear. If I were to try to explain it in technical grammatical terms, I'd probably say that since it is understood that the action is in the past, "that" is more appropriate, since "that" implies distance, while "this" implies closeness - the past is "at a distance" from the present.
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AnonymousIf
Thinking SpainThe action is in the past, but I'm explaining it in the Simple Present to make it more vivid.What I meant was, if the text has a sentence in the Simple Past, the students should change it to the Simple Present, and if it has a sentence in the Past Progressive, the students should change it to the Present Progressive, as an exercise