why is decreasing gas price a bad sign for the economy?
In: Economics
Lot of good answers another people haven’t mentioned and this is important for Canadians …
The value of your currency is largely based on the need for **foreigners** to buy it to acquire your goods. When Canada was exporting oil (before the crash) people had to buy Canadian dollars to purchase it (sorta…). Meaning our dollar would raise up. Now that we don’t sell oil there’s less need to buy Canadian dollars. Our value has gone from 1.3 USD : 1 CAD to over 1.4USD : 1 CAD within more or less weeks.
Worse is a lot of Canadian GDP is in the services/IP development industries (patentable software/inventions/hardware, etc). Typically, we book sales in USD meaning customers don’t have to buy CAD to pay us. It helps payroll because when the company buys CAD eventually to pay employees fewer USD make up more CAD.
But then we get hurt because things we import cost more CAD …
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