I was at barns and noble today i was reading a book of facts explaining to my friend about how he should read some. Then he noticed the back of his book said it was more canadian money than american money to pay for the book. After a few minutes of trying to explain it I could not. i tried saying a penny in canada is equal to half a penny in america because canada has half as much worth as america, this of course not being acurate but just hypothetical, still did not work can you please help me explain this to my friend.
canadian money is worth less aper dollar than ammerican currency. so it takes around $1.25CAD to buy $1USD worth of goods.
Let me put it in terms of scales. There is a universal scale based on the distribution of currency. There are various standards (e.g. gold, resources, etc), but they all even out with how much of the wealth is made into currency. Because different nations and governments have different wealth per capita rating, the currency is worth different in each region/nation. The reason it might be worth less in American is cause Canada could possibly have a better amount of wealth per capita.
you realize what you're saying is effectively bassackwards, right? per capita, there is more wealth in america. the fact that $1USD buys more than $1CAD is usually an indicator of such. also, his friend is wodnering why it costs more CAD than USD. Diferent issue. and yes, such things do vary much like you said on a global scale but when an item is sold in like markets, the pricing diference. Also consider the following fact, if commercial competition is strong, prices will be lower. stronger economies tend to have somewhat lower prices on certain items(I'm assuming a fully industrialized nation with full employment, in areas with more traditional economies this is not the case, see mexico example) other examples. In Mexico, 10 pesos are worth about a dollar. you can buy a 2 liter bottle of soda for around 3 pesos. In America, it often costs around $1+ this could potentially be attributed to what you described above. in this case, it costs over three times as much to buy the item in America, even though "less" currency is being used. similarly, there are around 125 yen to a dollar. the PS3 originally sold for around 60,000 yen in japan. It sells for around 600$ in the US. converted a PS3 originally cost around $520 in japan.(since then the PS3 had a 20% price cut since noone bought it in japan) this could be attributed to a fiercer electronics market in japan. The japs don't like crap like some americans do.
