EC102-12SPRING09b - Introduction Canada is often referred...

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Unformatted text preview: Introduction Canada is often referred to as a small open economy See Case Study in text: o The Increasing Openness of the Canadian Economy o The Canadian Balance of International Payments o The balance of payments is divided into two main accounts: o Current account o Capital account 12-1 Current Account 12-2 http://www40.statcan.ca/l01/cst01/econ01a.htm?sdi=balance%20payments 12-3 Capital-Service Account 12-4 Capital Account http://www40.statcan.ca/l01/cst01/econ01b.htm?sdi=capital%20account 12-5 Capital account also distinguishes between: 12-6 Official Settlements Balance 12-7 The Prices for International Transactions: Nominal Exchange Rate Appreciation Depreciation 12-8 Click on the following link for the current value of the Canadian dollar: http://www.canadianeconomy.gc.ca http://www40.statcan.ca/l01/cst01/econ07.htm Click on the following link to convert currencies http://www.economist.com/markets/currency/index.cfm http://www.economist.com/markets/bigmac/displaystory.cfm?story_id=11793125 12-9 Click on the following link for a currency cross rate table http://stockgroup.financialpost.com/currency_calculator.asp?sh=currencycalc Diagram 1: Equilibrium in the Foreign Exchange Market 12-10 FXR S E FXR 12-11 D Quantity of Canadian Dollars Q * Factors that Shift the Demand and or Supply Curves for Canadian Dollars A Rise in Domestic Prices Relative to Foreign Prices 12-12 Diagram 2: An Increase in Supply of Canadian Dollars 12-13 FXR S D Quantity of Canadian Dollars E FXR A Decrease in Demand for Canadian Dollars 12-14 Q FXR S D E FXR 12-15 Quantity of Canadian Dollars Q Real Exchange Rate...
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This note was uploaded on 02/11/2010 for the course ART AFM101 taught by Professor Mr.lushman during the Spring '10 term at University of Toronto.

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EC102-12SPRING09b - Introduction Canada is often referred...

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