Part 1

• Go to the X-Rates Web site (http://x-rates.com) and find the current:
• exchange rate for the US Dollar (USD) and Canada
• then from the icons below the currency selection boxes, select Graphs and then select 1 year;
• based on the 12 months of data, which currency is appreciating (gaining value) and which is depreciating (losing value)? Remember it can do both in a year.
• Now go to the CIA World Factbook and find out what goods and products Canada exports.
• NOTE: Since most all of the goods that you buy are either imported or contain inputs from other countries.
• What do the trends in the exchange rates tell you about the prices you can expect to pay for goods imported from Canada or for products that use inputs from Canada (i.e., the exports of Canada)?

Part 2

In a global economy most products contain materials from other countries and that includes food. If you had orange juice today, it may well have come from Brazil. Your computer and your cell phone contain parts from America or Japan or Taiwan or Thailand or one of the European countries or from all of these places. Thus, exchange rates directly impact the prices you pay for goods. This is your chance to learn more about how that works.

• Discuss whether the currency of Canada is appreciating or depreciating relative to the US Dollar.
• What do you think this means for American imports from Canada?
• What do you think it means for American exports to Canada?
• Refer to at least two different concepts from the following: Trade Policy, Recession, Depression, Aggregate Demand and Aggregate Supply Model (Aggregate Demand Curve, Aggregate Supply Curve), Natural Level of Output, Stagflation, Supply Shock, Fiscal Policy, Multiplier effect, Crowding Out Effect, Automatic Stabilizers or Phillips Curve
• Your illustration of the concepts MUST include an explanation why you think they are relevant to the topic using specific information from the articles.