CURRENCIES & EXCHANGE RATES Unit 2: Tourism and the Economy

In this Unit: Economic Impacts of Travel & Tourism Currencies and Exchange Rates Effects of Government Policies City-Centred Regions Economic Disparities

Big Idea Currencies and Exchange Rates effect tourism. Big Question How? How do currency and exchange rates effect tourism? What does it mean (for tourism) when Canadian dollar goes up/down?

What is currency? What are exchange rates? Watch: Exchange RatesExchange Rates Currency: a system of money in general use in a particular country Exchange Rate: the value of one currency for the purpose of conversion to another

Canadian Dollar vs. US Dollar What’s the trend? What does this mean for Canadians? For Americans? How does this impact travel/tourism?

Canadian Dollar vs. Euros What’s the trend? What does this mean for Canadians? For Europeans? How does this impact travel/tourism?

Canadian Dollar vs. Japanese Yen What’s the trend? What does this mean for Canadians? For the Japanese? How does this impact travel/tourism?

Canadian Dollar vs. Turkish Lira What’s the trend? What does this mean for Canadians? For Turks? How does this impact travel/tourism?

What happens when… Canadian dollar gets stronger versus another currency? Who benefits? What are the impacts of this change? Canadian dollar gets weaker versus other currencies? Who benefits? What are the impacts of this change?

When Canadian Dollar gets stronger… Canadians travelling to other countries can now buy more things with their money [GOOD] More money spent in the host country (multiplier effect) More money leaving Canada (we import more goods, we buy more goods from other countries)

When Canadian Dollar gets stronger… Canadian businesses suffer because their products now seem more expensive in comparison [BAD] Less money is coming into the country (exporting less goods)

Watch: Exchange rate could reduce Brazilian tourism in OrlandoExchange rate could reduce Brazilian tourism in Orlando

When Canadian Dollar gets weaker… Canadians don’t travel as much – because they can’t buy as much with their dollar in foreign countries More people want to visit Canada because it becomes cheaper to buy goods here. Businesses here gain more customers! Tourism in Canada grows We experience a multiplier effect in Canada Money is entering the country (we export more goods)

What is the Multiplier Effect ? When money is spent, this spending results in a multiplied effect on economic output When money enters the economy, it flows from one person to another – getting spent over and over again This means a little bit more spending has a lot more positive economic effects

Watch: Currency Exchange Rates and YouCurrency Exchange Rates and You

Why is China growing so fast economically? They are keeping their currency low so they can sell more of their goods to other countries. What benefits does this have? What kind of problems does this create?

In class Task Read: Heavy Reliance on Tourism Has Hawaii’s Economy Hurting Answer questions