Question

explain on what grounds it could be argued that this appreciation of the US dollar for Canada having good affects.

Answer 1

The appreciation of US dollar in respect to Canadian dollars will benefit Canada in improving their balance of trade. Appreciation of US dollar will make US goods more costly in Canada as they have to pay more canadian dollars per US dollar. Thus imports from US to Canada will decrease. Further, Goods manufacturered in Canada will become cheaper because US citizens can benefit by buying relatively more number of goods per US dollar. So demand for Canadian goods will increase and thereby exports. Hence exports increases and imports fall resulting in increase in net exports.