Back to School Basics: Currencies

What's the difference between the Canadian dollar and other forms of money? Elena Liavas asks Ian Tam.

Ruth Saldanha 28 August, 2023 | 4:45AM
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Elena Liavas: Hi, I'm Elena Liavas, and this is Ian Tam. When we went to Greece a while ago, we had to buy things in euros, which is different from Canadian dollars. What's the difference? Is one better than the other? I'm asking Ian about it today.

Is the Canadian dollar different from other countries' money?

Ian Tam: Hey, Elena. That's a great question. Yes, the Canadian dollar is actually a little bit different than other countries' money. So, I understand you're into gymnastics and figure skating. So, those are two very different sports, and very similarly, different countries have different, we call them, currencies. So, here in Canada, we use the Canadian dollar, which is pretty colorful and kind of plasticky feeling. Whereas in the U.S. they use the U.S. dollar, which is green and paper and kind of boring looking, to be honest. But one is not better than the other. They're just worth different amounts.

Liavas: How can I tell how much it is in Canadian dollars?

Tam: Yeah. So that's going to be dependent really on how many goods and services a particular country makes. So, if Canada tends to make more things than the U.S., then our currency or our money ends up being worth more than the U.S. dollar. So, it depends on that. But you can tell all that based on what we call an exchange rate. So, for example, in Harry Potter, there's things called Chocolate Frogs and there's things called Fizzing Whizzbees, but they're not worth the same. I mean, you trade one Chocolate Frog for two Fizzing Whizzbees. That's kind of like a foreign exchange rate. You trade for a particular amount based on that for exchange rate.

Liavas: Which is better?

Tam: Well, it's not really better or worse. It's worth different amounts. It all depends on when you need to use it and where you need to use it. So, if you were to travel with your family down to the United States, you'd have to change your Canadian dollars to U.S. dollars in order to buy things for you guys.

Liavas: Thank you, Ian. For Morningstar, I'm Elena Liavas.

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Ruth Saldanha

Ruth Saldanha  is Editorial Manager at Follow her on Twitter @KarishmaRuth.


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