Answer Key

1. Fact: A strong dollar makes Canadian-produced goods relatively more expensive and hurts export-based industries, particularly the auto and forestry sectors.
2. Fact: The decline in the price of crude oil, metals and minerals due to shrinking global demand are major factors in the loonie's performance.
3. Myth: TD Bank chief economist Don Drummond said his benchmark for the dollar is 85 cents US, because Canada's economy is approximately 85 per cent as productive as that of the United States.
4. Fact: Futures are frozen after falling 550 points.
5. Myth: A drop in the Dow of 10 per cent prior to 2 p.m. ET will trigger an hour-long market shutdown. A 10 per cent drop between 2 p.m. and 2:30 p.m. will cause a 30-minute outage. Trading would be halted again if the Dow falls by 20 per cent. A drop of 30 per cent at any time will trigger a halt for the entire day.
6. Fact: For 12 years from 1980 to 1991, Canadian prices increased on average by 6.0 per cent a year, more than three time the current average rate of inflation. The federal government clamped down on public spending, and the Bank of Canada hiked interest rates. That combination slowed growth as well as inflation.

Further reading:

• Inflation
• TSX stocks
• Loonie effect