CURRENCIES & EXCHANGE RATESUnit 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 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 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 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 TaskRead: Heavy Reliance on Tourism Has Hawaii’s Economy Hurting• Answer questions