Chapter 1
1. Has the inflation rate in Canada increased or decreased in the past few years? What about interest rates?
R/. The inflation rate of CAnada is low. The inflation rate was at 1.10 % in August. And the interest rate was declining. In one news said that on 1915 until 2013, the Canada 's inflation rate 3.2% reaching an all time high of 21.6% in June of 1920 and got a record low at -17.8% in June of 1921.
2. If history repeats itself and we see a decline in the rate of money growth, what might you expect to happen to
A. Real output - is going down
B. the inflation rate, and - is going down
C. Interest rates - is going down All are going to fall.
3. When was the most recent recession?
According to the National
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With the rise in the dollar 's value in the early 1980s, travel abroad became relatively cheaper, making it a good time to visit the Tower of London.
Chapter 2
1.Why is a share of IBM common stocks an asset for its owner and a liability for IBM?
The share of IBM stock is an asset for its owner because it entitles the owner to a share of the earnings and assets of IBM. The share is a liability for IBM because it is a claim on its earnings and assets by the owner of the share.
2.If I can buy a car today for $5000and it is worth $10,OOO in extra income next year to me because it enables me to get a job as a traveling anvil seller, Should I take out a loan from Larry the loan Shark at a 90% interest rate if no one else will give me a loan? Will I be better or worse off as a result of taking out this loan? Can you make a case for legalizing loan-sharking?
I should take out a loan from Larry, if I make a case for legalizing that would give problem and can affect the bank. It 's not good make a case.
3.Some economists suspect that one of the reasons that economies in developing countries so slowly is that they do not have well-developed financial markets. Does this argument make sense?
Yes, because the absence of financial markets means that funds cannot be channeled to people who have the most productive use for them. Entrepreneurs then cannot acquire
The Canadian economy today is at an all-time high with higher economic growth and rising GDP Canada is seeing great changes in the economy. The GDP increase by 1.1 percent in just the first 3 months of 2017. Canada is quickly recovering from the decline in oil prices that significantly slowed down the growth of the Canadian GDP. Because oil plays such a major role in the Canadian economy this had a huge tole on the overall GDP of this country. But, as the country approaches an increased GDP the energy sector does not seem to be hindering the GDP any longer. With the price of oil and gas going back up this has significantly increased the GDP of Canada due to the large amount of petroleum that Canada produces.
After reading Dinner Party Economics, written by Eveline J. Admit and Richard G. Maranta, I find myself asking many questions. One of which is how Canada is doing with macroeconomics policy and the political debate. Today, March 2016, Canada is not doing its best job. With the current price of the Canadian Dollar, our economy is not in good shape. In the past year, the Canadian Dollar has taken a huge dive. With the rising costs of living, Canadians are finding it harder each year to afford basic needs for their families. Gas prices and fresh food at markets continue to rise to record levels. The unemployment rate in Canada also continues to rise. With less people working full time jobs, families are finding it very difficult to support a family
While import costs for goods and services are rising, the average income is not. Imports costs are increasing as the value of the Canadian dollar falls. People who are working for a minimum wage have almost no chance to purchase their own property in the near future. Housing prices in Canada are constantly growing and are reaching record highs. In Canada, the average cost of living is about $20,164 per year; which makes it quite difficult for individuals earning a minimum wage to support themselves (Young, 2015). The increasing cost of living is often mentioned from consumers based on an eye test. However, with the fallen value of the Canadian dollar, this is becoming truer by the day. In its most recent decline, the Canadian dollar has decreased by fourteen percent to just above seventy three cents US (Sreauss, 2015) Canada imports almost 81% percent of its fruits, vegetables and nuts. Thus, as the Canadian dollar decreases in value, the cost of these items has increased. This results in families spending more of their income on living expenses. Unfortunately for Canadians, their income has not increased at the same rate (CBCNEWS, 2015). For individuals on social assistance, the amount received rarely covers both the cost of shelter and food, leaving many to rely on food banks. On social assistance, a family would need to spend 37% of its income on food and 69%
Canada’s economy has to face many issues. One of these being the rate of exchange. The canadian dollar has been going up and down constantly throughout many years. “The first paper money issued in Canada nominated in dollars were British Army notes, issued through 1813, The Bank of Canada was created in 1934 and given responsibility, through an Act of Parliament.” Much has happened to the dollar throughout the years; the economy always varied depending on the dollar worth because it has always played a major role on the economy. Pertaining to the issues of the exchange rate, I will discuss two main ways of it and how it plays a big role on the economy in present times.
With a low, stable rate of inflation, unemployment rate fluctuating within a couple percentage points, and job creation continuing to rise, indications are that Canada’s economy is thriving. While the Great Recession of 2008 was disastrous to its southern neighbor, Canada managed to keep its economy from tanking in tandem. Canada’s monetary, fiscal, and government policies are
In the recent few decades, Canada has shown significant progress in the overall framework and currently ranks tenth in the world regarding nominal GDP. The real estate industry is the most dominant sector, the country also is one of the largest exporters of natural gas and petroleum on the one hand
Canada is similar to the US in its market-oriented economic system, production, and standards of living. Canada’s economy grew steadily from 1993 through 2007; however, due to downturns in the global financial markets, Canada’s economy followed suit. By the end of 2008’s meltdown, Ottawa experienced its first financial deficit in twelve years. “Canada’s major banks, however, emerged from the financial crisis of 2008-09 among the strongest in the world, owing to the early intervention by the Bank of Canada and the financial sector’s tradition of conservation lending practices and strong capitalization” (CIA, 2015). Canada achieved some moderate growth in 2010-14 and plans to balance the budget by the end of 2015, despite the recent drop in oil prices. Previous growth in its dealings with the U.S. have made Canada the world’s fifth-largest oil
It is recommended that Canada adopt and implement a more active fiscal policy and cut interest rates to ensure the prices of commodities remain low. Low commodity prices can potentially stimulate demand over time and boost exports, benefiting the country’s economy, including its beleaguered commodities sector. At the same time, tax incentives for business and consumers to pursue alternative energy projects could further stimulate the economy and lead to strong consumer confidence in the levels of permanent income increasing over time. Buttressing short-term efforts such as cutting interest-rates with tax incentives to promote long-term growth and a shift toward a more diverse economy could help Canada address both its short-term and longer-term economic woes. Moreover, this two-tiered approach would likely generate an increase in consumer spending as the government’s approach would promote greater confidence in a more diverse Canadian economy being able to grow over time, thus providing individuals with greater spending
In the 1970s and 1980s the Canadian economy was plagued by issues of inflation and unemployment, or stagflation, as it came to be known. It is generally believed the “severe years of surging inflation and unemployment were the result of the first (1973-1974) and second oil shocks (1979-1980), and the double digit inflation rates in many countries (though not all) that provoked the sense of crisis in these years were caused by the high price of energy, a major factor input” (LK, 2011). However, it is clear that inflation was already a problem in Canada prior to these oil shocks. What caused the inflation in the 1970s is of some debate; but it most likely resulted from the overly-expansionary monetary policies employed by the Bank of Canada;
# (Bernard 2015) Although lower gasoline and consumer prices should help lift purchasing power and sustain real household spending, it likely won’t be enough to counter the trend of easing growth in household spending in Canada. Soft employment growth, weak wage gains, the high level of household debt, easing real estate markets, and the threat of job losses in oil-rich provinces will combine to take some of the steam out of real consumer spending in 2015—even as overall inflation falls to just 1.2 per cent.
However, there are other signs that the economy is weakening. Since January’s retail sales came in lower than expected. Retail sales dropped 1.7 per cent in course of January till December. Year over year, sales were only up 1.2 per cent. The Bank of Canada cut its rate by a quarter point to 0.75 per cent in January. They stated that it was “insurance” against the possible effects of plunging crude oil prices on Canada’s economic growth. It is also widely speculated that the Bank of Canada Governor Stephen Poloz could cut again if the economy gets worse. January retail sales where unusually weak. The sharp drop in global crude oil prices will be more negative for Canadian economic growth and underlying inflation than the central bank is hoping for. Food prices increased 3.9 per cent in February and it is the first category to feel the impact of a lower loonie. Beer, which historically was been untouched by currency swings, has also risen due to the fact that most of the beer consumed in Canada is now imported. Beer was up 4.8 per cent in
Briefly explain the rise and fall of LTCM. What was the moral hazard issue the fed was worried about? How did they try and get around the moral hazard issue? What specifically was the Fed's role in the bailout? What roles specifically did Bear play and not play in the LTCM's life and death?
With Canada’s economy growing in every direction, we see a lot of new changes done by the Bank of Canada; which can have vast affects on the economy and our standard of living. In this analysis I look at three variables: the Bank Rates, Consumer Price Index (CPI), and Foreign Exchange Rates. Before I get into the actual data I’d like to give a brief description on how each variable affect each other. As we know interest rate and inflation have a negative relationship, meaning as one increase the other decreases. The Bank of Canada tend to increase interest rates if they see that inflation is starting to increase so they increase interest rates to reduce the inflation rate and vice versa. However for exchange rates and interest rates the
SFAC No. 6 defines equity as the residual interest in the assets of an entity that remains after deducting its liabilities. If options and warrants do not meet the definition of liabilities, then they must meet the definition of equity. A liability is an obligation that embodies a future sacrifice of assets. The company owes no assets to option or warrant holders. There is no present obligation to surrender assets or perform services. If stock options and warrants do not meet the definition of