Exchange Rate vs Export Amount

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Data Management

Culminating Project:

Exchange Rate VS Export Amount

by: Ellen Zhang

The Relationship between the Exchange Rate and the Export Amount in Canada

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Ellen Zhang

Ms. Provisionnato

MDM4U1

Date: December 20th, 2012

Table of Contents

Introduction-------------------------------------------------------------------4

One Variable Analysis------------------------------------------------------6

Exchange Rate---------------------------------------------------------6

Export Amount-------------------------------------------------------11

Two Variable Analysis------------------------------------------------------17

Venn Diagram----------------------------------------------------------------24

Conclusion---------------------------------------------------------------------26

Work Cited---------------------------------------------------------------------27

Introduction

• Question

Is there any relationship between the exchange rate of a country and their export amount?

• Reason of Choosing Topic

The reason that I chose this topic to investigate is I take the course Grade 12 Current Economic Issues Analysis now, and I learn according to the change of the exchange rate of a nation, it will have an influence called export and import effect. But my teacher just mentioned it; he didn’t teach us deeper knowledge of these things. And I have a great interest and curiosity of this topic. Also, I want to attend the economic program in the university. This may help me and related well in my future study.

• Background/History

With the victory of the World War Two, 730 delegates from all 44 Allied nations were gathered at the Bretton Woods, New Hampshire, United States, by the United Nations Monetary and Financial Conference. During the meeting, they set up a system that an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar. And then, the United States terminated convertibility of the US$ to gold. This brought the Bretton Woods system to an end and saw the dollar become fiat currency (Birth of a money system, London MacMillan, 1978).

• Importance of Investigation

It is very important and necessary to investigate this question since the exchange rate must to be kept in a constant value, the exchange rate cannot neither be too high nor too low. A constant value of exchange rate represents that the economic performance of that country is stable and reliable. The financial crisis or recession will have low probability to occur. If there is no financial crisis or recession, it will not break out the war. Every country in this globe is happy, safe and peace.

• Who this investigation would interest

In my opinion, there are two groups of people may interested in this investigation. One is the government official, because the government is the person who order the nation bank to change the money supply, and money supply decide the exchange rate. Also, the officials in government decide where the nation’s good to sell by how much. The other one is the economists, since the economists can be considered as the helper of the government; they give the suggestion and prediction to the government what action should be taken according to the research and investigation to improve the economic in the future.

• Hypothesis

My hypothesis is that the correlation between the exchange rate and the export amount will be negative and strong. The reason that I predict the correlation is strong is that when the exchange rate increase, this means the value of Canadian dollar is increase, and the price level in Canada is increase as well. Other countries will think Canadian goods are too expensive to purchase. Hence,...
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