The powerpoints are designed to be quick notes to review. But I think the powerpoint got something wrong, and I want to be sure of it (because if I have it wrong I have some reviewing to do).

The Powerpoint says:

When the Canadian dollar appreciates, rest of world demand for Canadian exports increases.

But I'm pretty sure when the Canadian dollar appreciates, rest of world demand for Canadian exports decreases, and rest of world demand for Canadian dollar increases?

When a currency appreciates, the demand for their goods to be exported decreases, ceteris paribus. The powerpoint is correct and you're incorrect.

Think of it like this - if your currency appreciates in comparison to foreign currencies, the foreigners will have to give more of their own currency to get the same amount of your currency. Therefore they'll have to give more of their own currency for the same number of goods from your country.

Whether the demand for their currency increases as it appreciates isn't really as definitive, but in basic economics, yeah probably. The strengthening of a currency is an indicator of your purchasing power with that currency, so you effectively buy more goods with it as a result.

This post was edited by dro94 on Nov 28 2016 02:24pm

The powerpoint literally said the opposite (as stated in my first post)... so uhhh?

This post was edited by Canadian_Man on Nov 28 2016 07:31pm

lower dollar = more attractive goods

Dollar down = Exports up
Dollar up = Exports down

This post was edited by ChronFather420 on Nov 29 2016 01:01am

all i know is my post is correct, i dont know what your powerpoint says dude

In THEORY, when the Canadian dollar falls, its exports should be more attractive for the rest of the world to buy. And vice versa.

In practice, there are real life frictions / exceptions to the rule *(majority of the time textbook theory doesn't align with reality).

I bolded the part at which you are incorrect! The statement "When a currency appreciates, the demand for their goods to be exported decreases, ceteris paribus" is in agreement with the original poster's train of thoughts.

@original poster, thou art correct. If the powerpoint tells you export will increase when domestic currency appreciates in comparison to the countries to which you export, the powerpoint is flawed at this point (for reasons stated in previous posts - it would simply cost more).

Ya because i thought the powerpoint was saying the opposite. op did a shitty job of explaining.

Lower currency - neighbours buys more
High curency - neighbours spend same amount of money, for lesser good
Demand for Canadian may increase though

This post was edited by zayl121 on Jan 26 2017 03:25am