Canada's dollar has been unstable for the past several years; however, there has been a recent sharp decline since the early 1990s. Compared to the American dollar, Canada's is currently valued at sixty-five cents. In the beginning of the century; however, the Canadian dollar was not as weak as it is today, there was even a point where it surpassed the mighty American dollar. The value of Canada's dollar remained fluctuated from approximately $1.00 to $1.15 US from the 1920s until end the 1970s, which was where dollar declined rapidly for over eight years,

There is a very close connection between employment and trade, and therefore, the Canadian dollar. Protectionist legislation, whether through tariffs or import quotas, raises prices of imported goods. If these goods are raw materials or finished products needed by Canadian companies, the ability of these companies to produce competitively is decreased. By searching to protect one industry, legislation reluctantly damages other industries and their employees. This lowers competitiveness and contributes to unemployment. Thus, extreme protectionist legislation restrains international trade and leads to substantial unemployment. When the dollar is low, exports increase, which boosts demand, and as a result, supply increases in order to keep up; therefore, more jobs would be created due to the need for workers to produce these goods and services. (Graph #2 displays the relationship between the Canadian dollar and unemployment.) In addition, a devalued dollar would attract more foreign investment, and thus, creating more jobs. The rational behind this is that it is less expensive for international investors to produce in Canada, because foreign currencies are stronger when compared to Canada's, which enables them to cut costs. In contrast, a high dollar would have the opposite effect. Exports would decline, which would lower demand, and as a result, companies may have lay off workers due to lost of profits and increased costs. In the late 1980s, the appreciation of the dollar resulted in a net loss of 24,200 manufacturing jobs. Furthermore, foreign investment would decline, and thus, cut down job openings. A higher dollar could mean a lost in several jobs; however, if Canada could sustain its competitiveness, further unemployment could be prevented.

However, the value of a nation's currency has only a circumstantial relationship to its economic health and vitality. The wealth of a country depends on the

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Approximate Word count = 1300
Approximate Pages = 5 (250 words per page double spaced)