Homework: Canada's Trade Deals with the United States Impacts the Microeconomy and Macroeconomy of Canada
Learning Objective
o Define the economic problem and explain the different types of economic systems that have been used to allocate resources and distribute output.
o Analyze how the market system allocates resources.
o Assess the economic, political, and institutional forces affecting the distribution of in income in Canada today.
o Examine the performance of the macroeconomy over time and explain the link between this performance and the problems of unemployment and inflation.
o Analyze the economic factors that affect the level of aggregate economic activity over time.
o Evaluate government policies to stabilize the macroeconomy.
o Analyze Canada's international economic relationships, including trade polices, and examine their impact on the domestic economy.
o To demonstrate how Canada's trade deals with the United States impacts the microeconomy and macroeconomy of Canada.
Instructions:
1. To prepare for this homework, review the content in Modules 1 to 13.
2. Conduct research about Canada's trade relations with the United States focusing on pre-1994 trade relations, the NAFTA trade deal in 1994, and current (2018 - present) proposed changes to NAFTA to create the new USMCA trade deal.
Task:
Analyze the impact of changes in NAFTA to the Canadian economy on both microeconomic and macroeconomic levels as the new USMCA trade deal moves toward its planned implementation on June 1, 2020.
• Describe 3 main highlights of the original 1994 NAFTA agreement focusing on Canada's trade relations with the US. The highlights should generally describe benefits each country planned to receive from NAFTA.
• Describe 3 main changes proposed in the re-writing of NAFTA that will eventually become the new USMCA.
• Using your knowledge of microeconomics learned from this course describe how you think the USMCA will impact the microeconomy of Canada. For instance:
o What industries in particular would benefit?
o How will the lives of every day consumers be impacted?
o What will be the effect on prices for goods and services in the industries impacted by the USMCA?
• Using your knowledge of macroeconomics learned from this course, describe how you think the USMCA will impact the macroeconomy in Canada. For instance:
o How will these relations impact income distribution in Canada?
o Will Canada's GDP be positively or negatively impacted? Provide reasons.
o How will the USMCA impact unemployment and inflation in the first year it is implemented?
• Refer to your response in question 2. above. Provide an opinion on how the Covid-19 Pandemic will affect each of the 3 changes proposed. Provide reasons to support your opinion.
• Provide 1 new trade policy you think the Canadian government should include in the USMCA. How will this new policy economically benefit Canada and individual Canadians? What economic benefits would there be for the US?
Format your homework according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.