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...
Economic Structure
Canada’s economy cannot be properly explained without considering its dependence on US economy. ... Although the economic base has shifted away from natural resources towards manufacturing, service, and information technologies, natural resources still remain important for the economy. ...
Inflation
Under the strong economy, core consumer price inflation is stable at 1. ... However, Canadian exports are expected to recover as US economy strengthens in line with improved consumer confidence and strong equities markets. ...
(1) Dependency on Primary sector export: Although small in relation to the size of the whole economy, the primary sector continues to play an important role in the economy. ...
(2) Dependency on US economy: The manufacturing sector’s dependency on US economy has also significantly increased. ... However, as the US economy continues to grow and its interest rate is likely to increase in the near future, the pressure for the Bank of Canada to increase interest rate would become higher to stabilize the exchange rate to the US dollar. ... Although the expansion of the US economy is particularly beneficial to those areas, the growth is distributed unequally across provinces, with above two provinces enjoying a large share of the benefits, while others have lagged behind.
Overall, we believe that Canada’s current problems come from the fact that its economy lies on short term equilibrium.
Approximate Word count = 1496
Approximate Pages = 6
(250 words per page double spaced)
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